Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

WESTERN ISLES ISLANDS COUNCIL (LOCH ROAG) ORDER CONFIRMATION

Mr. Secretary Younger presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Western Isles Islands Council (Loch Roag); And the same was read the First time; and ordered to be considered upon Tuesday next and to be printed [Bill 54.]

Oral Answers to Questions — SCOTLAND

Local Authority Employees

Mr. Michael Martin: asked the Secretary of State for Scotland whether he has made an estimate of the likely job loss among local authority employees as a result of the cuts in local government finance for the year 1982–83.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): No, Sir. It is for each local authority to consider its staffing policies in the light of all the resources available to it.

Mr. Martin: Surely with 3 million people unemployed in the United Kingdom—347, 000 in Scotland—the Secretary of State should not be considering making cuts in local government expenditure, thereby causing more unemployment. In view of the recent unemployment figures, should he not tell the Prime Minister that he does not want to be responsible for the misery and suffering that is being experienced in Scotland by the unemployed and be prepared, because of unemployment and cuts in local government in Scotland, to follow the example of the Solicitor-General for Scotland and resign?

Mr. Rifkind: Local authorities know that they can reduce their staff without compulsory redundancies. When the Labour Government called on the Scottish local authorities to reduce their staffing, they claimed that they could make 10, 000 redundancies. They reduced staffing over 18 months by approximately 12, 000, with hardly any compulsory redundancies.

Mr. McQuarrie: I am sure that what my hon. Friend has said is true of Scottish local authorities. Despite any economies which are necessary on the financial side, there are adequate numbers of administrative staff employed in local authorities.
Does my hon. Friend agree that the administrative staff in the overmanned planning, education and other departments of local authorities could be reduced in a manner that would do no harm to the authorities?

Mr. Rifkind: My hon. Friend is correct. It is regrettable that Scottish local authority staffing is still 11, 000 greater than it was in 1977. At the same time, local authorities in England and Wales have managed to reduce their staffing levels, without compulsory redundancies, to the lowest figure since the reorganisation of local government. If it can be done in England and Wales, it can be done in Scotland.

Mr. Home Robertson: How many jobs have been lost as a result of the so-called natural wastage that the Minister has imposed on local authorities? Does the hon. Gentleman accept that such wastage is far from natural and that all it does is to deprive thousands of young people of jobs and the community of urgently needed services?

Mr. Rifkind: If the hon. Gentleman were to consider his remarks for a moment he would realise that one of the significant causes of job losses in his area and elsewhere in Scotland has been excessive rate increases. These have had to be paid by small and large businesses irrespective of their profitability. Therefore, they have had to pay by reducing their manpower.

Common Fisheries Policy

Mr. Myles: asked the Secretary of State for Scotland what level of agreement has now been reached in negotiations for a common fisheries policy.

The Secretary of State for Scotland (Mr. George Younger): Agreement has been reached on a revised marketing regime, on important areas of the external regime and on a further interim scheme for the construction and modernisation of fishing boats. Agreement in principle has also been reached on a comprehensive range of conservation measures.
Although useful progress has also been made in some other areas, including control and structure, the important issues of access and quotas remain to be resolved. To this end my colleagues and I are pressing for a resumption of the negotiations at the earliest possible date.

Mr. Myles: I know that my right hon. Friend is fighting strongly for those acceptable access and quota arrangements, but will he ensure that any necessary conservation measures are taken after due consultation with the industry so that no undue damage is done? Will he also make a categoric statement that, if no agreement can be reached this year, there will be no fishing up to the beaches after the end of 1982?

Mr. Younger: I assure my hon. Friend that in any conservation measures that are taken we shall do our best to consult the industry beforehand and to take it with us on all points.
I also assure my hon. Friend that our objective is to reache an acceptable common fisheries policy, but if by the end of the year there is no such policy the Government will have to look hard at the interests of British fishermen to consider what should happen thereafter.

Mr. Grimond: I thank the Secretary of State for his final remark that the Government will look carefully at the interests of British fishermen. Will he set a time limit on


the negotiations and inform our colleagues that unless agreement on access and quotas is reached by a certain date we shall take our own measures to conserve our fisheries?

Mr. Younger: I appreciate the point that the right hon. Gentleman makes. We have made it clear to our partners in the Community that, as we have been near to agreement, it would be tragic if it were missed at this stage. We shall be pressing as hard as possible to get an agreement as soon as possible

Mr. Donald Stewart: Is the Secretary of State aware that failure to reach agreement means that Common Market countries will have the same rights at the end of this year as our own vessels? Therefore, will the Government make it clear that, failing an acceptable agreement within that time, we shall revert to our rights over a 200-mile limit?

Mr. Younger: As the right hon. Gentleman knows, that is not part of the treaty obligations. I assure him that there are good reasons for the other countries concerned, without exception, to want a common fisheries policy agreed. There is a strong incentive on everyone to try to reach agreement.

Mr. John MacKay: Does my right hon. Friend accept that the best way to achieve our aim on conservation is to proceed with local fishing plans and the licensing of boats that can operate in those areas, with preference being given to boats from the local area?

Mr. Younger: I agree with my hon. Friend. That concept has found favour with the Commission in the past. We have been pressing strongly for such fishing plans, where appropriate, with particular reference to The Hague agreements, which give special preference to local fishing communities that depend on fishing for their living.

Mr. Millan: What are the Government's minimum conditions for an acceptable CFP? Do those conditions still include an exclusive 12-mile limit? What are the Government's views on the 12 to 50 miles zone, or have they abandoned that concept?

Mr. Younger: The Government's objectives in the negotiations have not changed. We intend to proceed with them in close negotiation with the fishing industry at all stages. Our objectives remain to provide for a broadly exclusive 12-mile zone, taking account of some essential historic rights of other countries, and further measures of preference to protect coastal communities that depend heavily on fishing.

Unemployment

Mr. Robert Hughes: asked the Secretary of State for Scotland if he will make a statement on the level of unemployment in Scotland.

Mr. Younger: On 12 January 1982, seasonally adjusted unemployment in Scotland stood at 307, 900, or 13·6 per cent. The Government's main priority is to reduce inflation, which has been the main reason for the loss of markets and jobs.

Mr. Hughes: Does the Secretary of State realise that, as the unadjusted seasonal figure is 346, 500, the whole of Scotland will be outraged by his pallid apology and his abject failure to protect employment in Scotland? Will he

stop acting like a quivering jellyfish? Will he show some courage, stand up to the Prime Minister, say that enough is enough and demand action to arrest this inexorable slide to total disaster?

Mr. Younger: I agree with the hon. Gentleman that unemployment is a matter of extreme concern to everyone in Scotland, including myself. The hon. Gentleman will be glad to note that his local area has an unemployment level of 7·1 per cent., which is approxiamately half the Scottish average. What I have to stand up against are policies which, over many years have weakened British industry and forced it to lose markets and jobs. That is what the Government are trying to reverse.

Mr. Maclennan: In regard to unemployment in the Moray Firth area caused by the closure of the Invergordon smelter, I recognise that the Secretary of State may not wish openly to indicate the precise terms that would be acceptable to the Government for an incoming operator, but has the right hon. Gentleman empowered the Highlands and Islands Development Board, in its approaches to companies, to be completely open-ended about the terms that can be offered relating to power and the acquisition of the site and plant?

Mr. Younger: I am not sure what the hon. Gentleman means by "open-ended". I assure him that the Highlands and Islands Development Board, in conjunction with the Scottish Office, has been encouraged to do everything that it can to find another operator and to discuss with such an operator a power contract on the best terms that can be achieved. The same applies to the acquisition of the site. The Government are pressing ahead with the board as strongly as possible on these points.

Mr. Ancram: Will my right hon. Friend confirm that there is some hope for Scotland, in that the seasonally adjusted figures show a rate of increase in Scotland of only about half the rate of increase for the rest of the United Kingdom? Does he accept that there is genuine concern on the Conservative Benches about the human problems encompassed by unemployment, in sharp contrast to the largely synthetic and politically motivated protests by Opposition Members?

Mr. Younger: I am grateful to my hon. Friend for his remarks. I repeat that no one in any party in Scotland can be anything but extremely concerned about the level of unemployment. My hon. Friend is right to contrast the present situation with what has prevailed throughout my lifetime. The whole of Britain has suffered severely, but on this occasion Scotland has not suffered so severely as the rest of the United Kingdom. That indicates some recovery in the relative position of Scotland, and that we must work upon.

Mr. Millan: Is the Secretary of State saying that a record figure of unemployment in Scotland of 347, 000 demonstrates that Scotland is not suffering severely under the present Government? Does he not appreciate the wave of anger and bitterness that swept Scotland following yesterday's figures—a bitterness that was added to by his pathetic attempt yesterday, as on earlier occasions, to pretend that things are getting better when they are obviously continuing to worsen? Does he realise that the need now is not for tiny doses of reflation but for massive reflation in terms of help to industry and public


expenditure if we are to get people back to work? The sooner this happens the better. Otherwise, he does not deserve to be in office.

Mr. Younger: The right hon. Gentleman has invented his own version of what I said a few moments ago. That version bears no relation to what I actually said. If the right hon. Gentleman has not yet appreciated the real reason for the rise in unemployment, he occupies a much stranger position than I thought. He should know that the real reason is that too many of our companies and firms have lost markets through being uncompetitive. The Government are working successfully towards reversing that situation. That has been needed for many years.

Small Businesses

Mr. Pollock: asked the Secretary of State for Scotland if he is satisfied with the state of the small business sector of the economy in Moray and Nairn; and if he will make a statement.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): As in other parts of the country, the small business sector in Moray and Nairn is facing difficulties from the effects of the world recession, but it is benefiting from the various financial and other incentives introduced by the Government since 1979 and is currently being promoted under the business opportunities programme. The Highlands and Islands Development Board and the Scottish Development Agency are active in support of small firms in their respective areas.

Mr. Pollock: I note the terms of my hon. Friend's reply. Will he confirm that one of the most pressing worries in the constituency is the continuing threat of the withdrawal of assisted area status later this year? Will my hon. Friend give an undertaking that there will be no such withdrawal until there has been the fullest and most careful consideration of all the representations in favour of retention?

Mr. Fletcher: Yes, Sir.

Mr. Foulkes: Are not small businesses in Moray and Nairn suffering to the same extent as all small businesses in Scotland from high energy costs, high interest rates, the doubling of value added tax and the slump, caused not by world recession but self-induced by the Government? Is it not time that the Minister followed the example of the former Solicitor-General for Scotland and resigned?

Mr. Fletcher: There is no justification for saying that the recession applies only to Scotland and not to the rest of the Western world. The hon. Gentleman has listed some of the problems. I agree that there are serious problems. I should, however, like to mention some of the 70 measures introduced by the Government since 1979 to help small businesses. We have amended employment legislation, we have introduced the loan guarantee scheme and the venture capital scheme, we have cut the absurdly high marginal rates of income tax and we have also cut corporation tax. These are only a few of 70 measures that help small businesses in Scotland today.

Mr. Myles: As my hon. Friend knows, the Moray district covers part of my constituency. Will he pay attention to the fact that the Grampian region scheme for expanding small businesses has a 90 per cent. success

rate? Does he agree that this is a vital factor in an area where small businesses are more important than in some other areas?

Mr. Fletcher: I am delighted with my hon. Friend's remarks. The business opportunities programme seminars held all over Scotland, not least the seminar held in Aberdeen, have been successful.

Mr. Harry Ewing: In view of the important assurance that the Minister has just given about reconsideration of the withdrawal of assisted area status in the Moray and Nairn area and in view of worsening unemployment throughout the whole of Scotland, will he give a similar assurance to every area in Scotland, including the Central region from which assisted area status is to be withdrawn? Will the most serious reconsideration be given to every area before the Government go ahead with their decision?

Mr. Fletcher: Yes, Sir. In reply to my hon. Friend the Member for Banff (Mr. Myles), I was referring to areas which have been downgraded by more than one step.

British Leyland

Mr. Dalyell: asked the Secretary of State for Scotland if he will make a further statement on the contact between his Department and the office of the Comptroller and Auditor General on matters relating to the sale of British Leyland assets at Bathgate.

Mr. Younger: My Department has provided all the information so far requested by the Comptroller and Auditor General's staff. The conduct of the investigation is a matter for the Comptroller and Auditor General.

Mr. Dalyell: In view of the delicacy of the situation at BL, may I ask a question of the Secretary of State of which I gave his office notice at 10 o'clock this morning? Had the position been clear-cut, assuming that the Comptroller has been given the co-operation promised by Ministers and BL, would he not have reported weeks ago? Therefore, should not the Secretary of State—

Mr. Speaker: Order. The hon. Gentleman knows the rules as well as anyone. Copious use of notes is one thing, but the hon. Gentleman should lift his eyes occasionally.

Mr. Dalyell: Should not the Secretary of State have used the good offices of the Government machine to help a factory which was brought to Bathgate by Mr. Macmillan? May I add—

Mr. Speaker: Order. The hon. Gentleman will be unfair to his colleagues if he adds to that.

Mr. Dalyell: In view of Sir Michael Edwards' statement this morning that he will not be chairman of Leyland in January 1983, should not the situation at Bathgate be left until such time as there is a new chairman?

Mr. Younger: I appreciate the hon. Gentleman's concern about this matter, which relates to his constituency. However, I repudiate any suggestion that my Department has not been totally helpful in every respect to the Comptroller and Auditor General. It has given every bit of information for which is has been asked as quickly as possible. It is for the Comptroller and Auditor General to decide how to conduct the inquiry. It is his responsibility to produce a report. However much we might wish to do so, it is not up to the Government to


interfere in industrial relations at the site and the factory. Indeed, the right hon. Member for Cardiff, South-East (Mr. Callaghan) made that very clear when he appointed Sir Michael Edwardes.

Mr. Millan: Yes, but, on the last point, does the Secretary of State appreciate that an extremely worrying situation has developed not only at Bathgate but in the bus and truck division of British Leyland as a whole? The House will not forgive Ministers if they simply sit back and allow the situation to deteriorate further. I appreciate the difficulties involved in direct intervention, but will the Secretary of State at least give a pledge that he will take a personal interest and see whether Ministers can do anything urgently to try to resolve some of the difficulties? Is the Secretary of State aware that the whole business is extremely worrying?

Mr. Younger: My right hon. Friend the Secretary of State for Industry and I take the closest interest in British Leyland's affairs, including those at Bathgate. However, we do not run the company, nor do we intend to run it. It is neither possible nor right for the Government to force a company to keep open a factory that has lost markets for its products. Having said that, we do, of course, take a close interest in it and will do everything that we can to help.

Local Government Finance

Mr. Ancram: asked the Secretary of State for Scotland what representations he has received about the reform of the local government finance system in Scotland.

Mr. Rifkind: From May 1979 to date my right hon. Friend has received about 170 representations mainly concerned with the rating system. He has also had between 30, 000 and 40, 000 representations about the need to protect ratepayers against excessive rate rises, and some of them have also expressed objections to the rating system.

Mr. Ancram: Does my hon. Friend accept that the present rating system is becoming increasingly unfair as it reflects less and less the ability of the ratepayer to pay? Does he agree that the system is causing severe financial hardship in regions such as Lothian and that there is an urgent need for reform? Will he urge local authorities to recognise the hardships? Further, will he urge the Lothian region to reduce its rates this year to give ratepayers a break?

Mr. Rifkind: On the general issue, my hon. Friend will be aware of the Green Paper, on which all interested parties have been asked to comment by 31 March. The Government will consider the representations urgently. Lothian region could reduce its rates without any reduction in spending. If it reduced its spending in line with other local authorities, the ratepayers would benefit enormously.

Mr. Home Robertson: Has the Minister seen the report today in The Scotsman, which reveals that the Government have increased the burden on Scotland's ratepayers by £72 million by manipulation of the rate support grant? As the Government are handling the present system of local government so deviously, how can we trust them to introduce a new fair system of local government?

Mr. Rifkind: Any additional burden on ratepayers is the result of certain local authorities refusing to moderate expenditure. The hon. Gentleman will recall that his right hon. Friend the Member for Glasgow, Craigton (Mr. Milian) said that the best way to persuade local authorities to reduce their spending was to reduce the rate support grant percentage.

Mr. Pollock: Pending the reform of local government finance, has my hon. Friend had drawn to his attention the Moray district finance committee's recommendation for the forthcoming year of a reduction of 2p in the rates?

Mr. Rifkind: I congratulate Moray district council if that is its intention. I have not the slightest doubt that many local authorities, if they have the will, can either reduce rates or impose only moderate increases.

Mr. Maclennan: Is the Minister aware that the Government's decision in their Green Paper to examine domestic rating in isolation has caused widespread disappointment in Scotland, particularly in the commercial community? Is he further aware that it would be more appropriate to review local government finance generally? Does the hon. Gentleman accept that the Green Paper is inadequate, because it deals only with local authorities' existing functions? Does he agree that not to consider structure at the same time as finance is to consider only half the problem?

Mr. Rifkind: I am sure that hon. Members on both sides of the House will accept that this is not the time to embark upon another major reorganisation of local government. The business and industrial community should appreciate that the Government have already suggested in the Green Paper that if domestic rates are abolished it might be desirable to examine the possibility of further protection for the non-domestic ratepayer against the consequences that might flow from that.

Mr. David Steel: Does the Minister agree that the Government must consider whether a two-tier system of local government is any longer viable in the sparsely populated areas of Scotland?

Mr. Rifkind: The Stodart committee examined a whole series of questions affecting the structure of local government. The main representations from all political persuasions, particularly from the main political groupings, reveal that Scotland does not want another major reorganisation of local government. The right hon. Gentleman should recognise that.

Weather Damage (Costs)

Mr. Norman Hogg: asked the Secretary of State for Scotland if he will adjust the rate support grant settlement for the next financial year to take account of the cost to local authorities of frost damage to local authority properties.

Mr. David Marshall: asked the Secretary of State for Scotland if he will make special financial provision for local authorities which have incurred additional expenditure as a result of adverse weather conditions.

Mr. Rifkind: As my right hon. Friend announced on 12 January, a special grant will be available to Scottish local authorities which have incurred exceptional expenses in dealing with the effects of severe winter


weather—mainly the additional costs of snow clearing operations and the repair of damaged roads. A circular will be issued shortly to authorities giving details of the conditions governing assistance. This special assistance will be over and above the grant that the Secretary of State proposes in the Rate Support Grant (Scotland) Order 1982.

Mr. Hogg: I acknowledge that the Government are taking some action, but when Cumbernauld is faced with an extra cost of £200, 000, Strathkelvin and district with an extra cost of £500, 000 and the city of Glasgow with a bill of between £25 million and £35 million, surely the Government recognise that they alone should bear the cost and that none of it should fall on the districts.

Mr. Rifkind: I thank the hon. Gentleman for welcoming the Government's initiative. If he believes that the Government's initiative is insufficient he should remember that the criteria under which aid will be given to local authorities in Scotland is on all fours with the response of the Labour Government when similar problems arose several years ago. We have proposed exactly the same type of help for local authorities. I am sure that the hon. Gentleman will accept that that is a reasonable response by the Government.

Mr. Marshall: Will the Minister confirm that, even after a levy on the rates and 75 per cent. Government assistance, there could be a minimum increase of 6p on Glasgow district council's rate for this one item alone? Does he agree that Government assistance is totally inadequate and that the Government should meet 100 per cent. of the costs?

Mr. Rifkind: It is an extraordinary proposition, which has not been followed by previous Governments, to suggest that 100 per cent. of expenditure should be met by the Government. The weather conditions affecting Glasgow were not significantly different from those affecting other west central Scottish local authorities. If there has been disproportionately greater expenditure in Glasgow, that may be for reasons within the control of Glasgow district council.

Sir Russell Fairgrieve: Will my hon. Friend remind Labour Members that there is no such thing as Government money—only taxpayers' money?

Mr. Rifkind: My hon. Friend does the House a service in educating Labour Members on the realities of life.

Mr. George Robertson: As one of the major costs, especially for district authorities, will be repairs associated with burst pipes, it is remarkable that the Minister has made no mention of any assistance to local authorities in meeting the cost of house repairs. Hamilton district council's assessment of these costs is in excess of £3 million. Are the Government to give no assistance to local authorities to meet these additional costs?

Mr. Rifkind: The present position was stated by the Labour Government. In a circular that they issued in 1976 they advised local authorities to insure themselves against the consequences of excessively inclement weather. Some local authorities have accepted that advice. If others have not, they may have to bear some of the consequences.

Sir Hector Monro: Will my hon. Friend take this opportunity to congratulate the vast number of local authority employees, especially those concerned with the

roads, the water boards and the police forces, on the tremendous work that they have done during the past six weeks to make life bearable in Scotland?

Mr. Rifkind: Yes, I have done so already. I am happy to repeat from the Dispatch Box the unqualified praise of all who experienced the superb contribution made by local authority employees.

Mr. Dewar: Is the Minister seriously saying that there will be no Government help to local authorities for the formidable costs that they will incur in repairing the fabric of housing and in dealing with burst pipes? That is a totally unsatisfactory response, which cannot be allowed to continue, especially when local government finance is being mercilessly squeezed by the Government's policies, at the diktat of the Treasury. Will he reconsider what help he can give to avoid a disastrous situation in the west of Scotland and, no doubt, in all other parts of Scotland?

Mr. Rifkind: I have stated the advice that was given and the recommendation that was made by the Labour Government. Scottish local authorities were informed at the time that, if they did not choose to take out insurance, it might be necessary for them to bear some of the consequences. We have received no detailed submissions from the local authorities on the issues to which the hon. Gentleman has referred. We shall have to consider to what extent any damage that was caused might have been covered by insurance. If it could have been covered by insurance and the local authorities failed to insure, we shall have to take that matter into account.

Mr. Hogg: On a point of order, Mr. Speaker. In view of the Minister's hopelessly inadequate reply, I reserve the right to raise this matter on the Adjournment, with your permission.

Mentally Handicapped Patients

Mr. Canavan: asked the Secretary of State for Scotland whether he is satisfied with the standard of hospital provision for mentally handicapped patients in Scotland.

The Under-Secretary of State for Scotland (Mr. Allan Stewart): Although many improvements have taken place at these hospitals in recent years, my right hon. Friend told health boards in 1980, following recommendations by the Scottish Health Service Planning Council, that services for the mentally handicapped should be in the group of services deserving top priority in the allocation of resources. We recently announced arrangements for monitoring boards' progress in implementing these recommendations.

Mr. Canavan: In view of the recent SHAS report on Lennox Castle hospital, which states that over 1, 300 mentally handicapped patients are living in grossly overcrowded and insanitary conditions, some of them in huts that were built over 40 years ago and were supposed to last only 5 to 10 years, will the Minister take urgent and immediate steps to provide the additional finance and other resources? Does he agree that this background is a damning indictment of the National Health Service's inadequacies? In particular, will he take steps immediately to provide the additional 100 nursing staff necessary to raise standards at Lennox Castle hospital even to the average for hospitals that cater for some of the most underprivileged but most deserving members of society?

Mr. Stewart: The Government accept that the SHAS report identified a number of unsatisfactory features at Lennox Castle hospital. In the first instance, this is a matter for the Greater Glasgow health board. We shall await its comments, although we keep in close touch with it. I understand that it is the health board's intention to phase out the unsatisfactory accommodation to which the hon. Gentleman referred. I am glad to be able to tell the hon. Gentleman that the number of qualified qualified nursing staff at the hospital has increased by 14 percent. in the past two years.

Mr. Henderson: Is my hon. Friend aware that the extension of hospital building that the Government announced last year was warmly welcomed in Fife, although there is continuing anxiety about psychiatric nurse recruitment, especially among males? In view of that, is my hon. Friend surprised that letters from the chairman of the medical committee of Stratheden hospital and myself to Fife health board on this very subject since July 1981 have met a stone wall of indifference and silence from the board? Will he use his good offices to get a better response than that?

Mr. Stewart: The Government place a high priority on recruiting and retaining skilled nursing staff and on increasing the proportion of male nursing staff in mental hospitals. If my hon. Friend cares to let me have the details in writing of the issue that he has raised, I shall consider them.

Mr. William Hamilton: Will the Minister extend the review to include all the rights of the mentally handicapped? A Bill that is passing through the House deals with mental health in England. When can we expect similar legislation to cover the well-known and well-publicised shortcomings confronting mental health patients in Scotland?

Mr. Stewart: I know of the Gentleman's interest in these matters. He will remember that we had an Adjournment debate before Christmas on one aspect of the general subject that he has raised. I have said that my right hon. Friend will be introducing legislation at an appropriate time to deal with the decision of the European Court of Human Rights on detained patients.

Sir Hector Monro: Is my hon. Friend aware that one of the premier hospitals for the mentally handicapped is the Crichton Royal at Dumfries? Will he consider as sympathetically as possible the plans of the area health board to provide accommodation for the adolescent mentally handicapped so that parents in South-West Scotland do not have to travel to Larbert to see their children?

Mr. Stewart: I accept the general point that my hon. Friend is making. There are plans for new units at Dumfries and these will be considered sympathetically.

Mr. Harry Ewing: Does the Minister accept that hospitals such as Lennox Castle and, to some extent, Larbert are far too large? Why do not the Government embark upon a programme of building new hospitals to reduce the size of existing hospitals and to provide decent conditions for patients and staff? Does the hon. Gentleman accept that that is the only answer to the disgraceful problem that has been revealed at Lennox Castle and elsewhere?

Mr. Stewart: The SHAS stated in its report that it had produced similar reports in 1974 and 1977. It referred to the absence of sufficient action by the Labour Government in the light of those reports. The current capital programme of about £20 million will provide a total of 900 new beds in Scotland.

Dogs

Mr. Henderson: asked the Secretary of State for Scotland if he will introduce measures to improve the control of dogs and to provide for a means to compensate persons who suffer damage from the uncontrolled actions of dogs.

Mr. Rifkind: The Civic Government (Scotland) Bill at present before Parliament provides a discretionary power for local authorities to assist the police in rounding up stray dogs, and the Scottish Law Commission is currently reviewing the law on liability in relation to animals. My right hon. Friend will consider carefully any recommendations when the commission submits its report.

Mr. Henderson: I acknowledge the useful step forward to which my hon. Friend has referred, which will be especially helpful in urban areas. Is he aware that there is great concern among farmers over the amount of sheep worrying that is taking place? Is he aware that a farmer in my constituency recently had a heartbreaking experience when 15 ewes were brutally savaged by dogs? Is he further aware that, although the owner of the dogs was taken to court and successfully prosecuted, my constituent received no compensation for the £2, 000 worth of damage suffered? Does my hon. Friend agree that dog owners should have insurance for third-party risks, which often arise in relation to personal injury compensation?

Mr. Rifkind: The whole question of civil liability for injury caused by animals is being considered by the Scottish Law Commission, which hopes to publish a consultative memorandum on the subject in the spring of this year.

Mr. McQuarrie: My hon. Friend referred—[HON. MEMBERS: "Wag your tail, bulldog."] I am grateful for the Opposition's support. My hon. Friend referred to the Bill relating to the control of dogs that has been introduced in another place. Is he aware that under the Bill control rests with the police, who are given additional powers to deal with the matter? Before the Bill reaches this House, will my hon. Friend consider the privatisation of the control of dogs? [Interruption.] I have plenty of time, but the Opposition have not. Is my hon. Friend aware that privatisation has been most successful in England and is creating a considerable number of new small businesses?

Mr. Rifkind: If the alternative was to take dogs into public ownership, privatisation would certainly be attractive to the Government. I undertake to consider my hon. Friend's point.

Rural Areas (Community Facilities)

Mr. Home Robertson: asked the Secretary of State for Scotland what financial assistance is available from his Department for the provision or improvement of community facilities in rural areas.

Mr. Alexander Fletcher: Capital grants are given by my Department to local voluntary youth and community


organisations in both rural and urban areas to assist them in providing or improving such facilities. Grants made in 1980–81 totalled £800, 000. I refer the hon. Gentleman to the reply on 21 January by my right hon. Friend to my hon. Friend the Member for Dumfries (Sir H. Morro).

Mr. Home Robertson: It has been written:
Joy shall be in heaven over one sinner that repenteth, more than over ninety and nine just persons".
Is the Minister aware that hundreds of rural voluntary organisations will be grateful that the capital grant scheme has been reprieved? Will he now publicly repent that he ever proposed such a stupid scheme?

Mr. Fletcher: I am glad to have the hon. Gentleman's support. The Government undertook extensive consultation, as a result of which my right hon. Friend decided to continue the scheme, although there may be some administrative changes, as the general public had made their wishes known so well.

Mr. John MacKay: Is my hon. Friend aware of the considerable pleasure and support for the decision announced to my hon. Friend the Member for Dumfries (Sir H. Monro)? Is he aware that throughout Scotland rural organisations, such as village hall committees, scouts and guides, greatly welcome the proposal to continue putting money into the rural areas rather than adding it to the already considerable sums given to urban areas?

Mr. Fletcher: I am delighted that there is such agreement on both sides of the House today.

Illegal Fishing (Prosecutions)

Mr. Russell Johnston: asked the Secretary of State for Scotland how many cases have been brought against trawlers fishing illegally within the three-mile limit in the last 10 years.

Mr. Younger: A total of 332 cases.

Mr. Johnston: When will the Government consider repealing the law as established in the Dingwall court decision in 1979, which has had the effect of opening inland waters to the predatory attentions of trawlers and changing what had been understood to be the law since the beginning of the century in what appears to be a wholly capricious fashion?

Mr. Younger: I do not think that it would be sensible to restore the legal position to what it was thought to be prior to that decision. I think that it is widely accepted that the whole body of legislation on inshore fishing is in need of revision. I should prefer to await the outcome of current consultations with the industry before formulating firm proposals for a comprehensive new regime for inshore fisheries.

Mr. Henderson: Does my hon. Friend agree that the subsantial number of cases suggests that courts do not impose sufficiently stiff penalties to discourage this kind of activity?

Mr. Younger: I do not fully agree with my hon. Friend, as the number is not exceptionally large, but very much in line with the number over the years, which is a measure of the effectiveness of our fishery protection services.

Mr. Donald Stewart: Is the Minister aware that the position is exactly as described by the hon. Member for

Inverness (Mr. Johnston) and that all fishing communities recognise that the decision has allowed illegal trawling to take place with impunity, as nobody can prove whether vessels are trawling at half-water depth or on the bottom? Is he aware that unless that decision is reversed, through new legislation, there will be no protection for the inshore waters?

Mr. Younger: There may be a need for new legislation once we have received the comments of all sections of the industry. However, I think that the right hon. Gentleman will agree that there are conflicting interests and that we cannot make everything perfect for both the inshore mobile fishing industry and the inshore static fishing industry. We must try to take account of the interests of both.

J. P. Coats (UK) Ltd.

Mr. Adams: asked the Secretary of State for Scotland if he will consider measures to assist J. P. Coats (UK) Ltd., in view of the difficulties it is experiencing in retaining its present work force at its Paisley mill.

Mr. Younger: Yes, Sir. My Department if already having discussions with the company about possible financial assistance for investment under normal Government schemes. My hon. Friend went into this in detail when he met the managing director on 18 January.

Mr. Adams: Is the Minister aware that 1, 000 jobs in Paisley are threatened by the company's action? Is he aware of the present serious situation in the area? Is he further aware that figures issued by the Department of Health and Social Services on 4 January showed that there were 17, 000 unemployed, or one in four of the male population? Is he also aware that that is the highest unemployment figure ever recorded in Paisley and at 18·1 per cent. is 3 per cent. above the figure for Scotland? Will he take firm and positive action to safeguard not only the 1, 500 jobs that the company intends to save but the 2, 500 existing jobs?

Mr. Younger: I appreciate the hon. Gentleman's anxiety. There is a threat to about 1, 000 jobs over the next two years. He will agree, however, that it is encouraging that the company concerned is investing new money to make a new, modern and up-to-date process, which should secure jobs in that process for a considerable time to come. I appreciate his anxiety about the extremely severe unemployment in the area, but I am sure that he will be grateful that some firms, such as Babcock and Wilcox and Howden's, are doing very well.

Biotechnology

Mr. John MacKay: asked the Secretary of State for Scotland if he will take steps to ensure that biotechnology is introduced into the school biology curriculum to enable senior pupils to appreciate the career potential of the biotechnology industry.

Mr. Alexander Fletcher: The biology syllabuses for the ordinary and higher grades of the Scottish Certificate of Education already contain a number of elements designed to foster understanding of some of the fundamental processes and applications of biotechnology. The certificate of sixth year studies course in biology


provides further scope through individual project work, which in some cases will involve local industry, for the study of biotechnology and its industrial uses.

Mr. MacKay: I thank my hon. Friend for that answer. Will he ensure that the curriculum for the ordinary and higher levels contains introductory work for biotechnology, so that, as this new and exciting industry develops in the next two or three years, pupils will leave school with some knowledge of the industry and of the career opportunities in it?

Mr. Fletcher: I am grateful to my hon. Friend for his interest in this important subject. The consultative committee on the curriculum is keeping the science curriculum under review and in so doing will take account of developments in the industrial and scientific world. The use of microcomputers in schools allows pupils to simulate processes that cannot be carried out in the laboratories.

Mr. Foulkes: Does the Minister agree that, with such a sophisticated curriculum, particularly in senior secondary classes, it is inappropriate to maintain discipline by the barbaric use of the Lochgelly belt? Will he welcome the decision by Strathclyde and Lothian regions to phase out the belt and repudiate the neanderthal view of the hon. Member for Argyll (Mr. MacKay)?

Mr. Fletcher: I have more faith in the ability of headmasters and school teachers to maintain discipline in schools than I have in the advice of the hon. Gentleman.

Mr. Speaker: We now come to questions relating to matters for which the Lord Advocate is responsible.

Mr. Hugh D. Brown: On a point of order, Mr. Speaker. On whose authority has the Order Paper been changed from the normal practice regarding questions relating to the Solicitor-General for Scotland? As far as I am aware, constitutionally the Secretary of State for Scotland has no responsibility for the Law Officers. Were you consulted about this change?

Mr. Speaker: The Government decide the order of the questions. Questions by hon. Members were readdressed by the Table Office to preserve the relative position in which they had originally been tabled. It is the Government's responsibility to decide who answers.

Conspiracy and Protection of Property Act 1875

Mr. Canavan: asked the Secretary of State for Scotland how many recent prosecutions there have been under the Conspiracy and Protection of Property Act 1875.

Mr. Rifkind: There has been one recent prosecution for a contravention of the Conspiracy and Protection of Property Act 1875, which resulted in a trial at Edinburgh sheriff court on 17 and 18 December 1981. My noble and learned Friend the Lord Advocate is not aware of other recent prosecutions for contraventions of this Act, but such statistics are not recorded separately and could be obtained only at disproportionate cost.

Mr. Canavan: Are not the Scottish prosecution authorities guilty of a shameful distortion of priorities when they dig up a law more than 100 years old to prosecute a trade unionist whereas they decided not to prosecute in the recent horrific Glasgow rape case? Does not that deplorable decision by the Crown Office and the Scottish prosecuting authorities underline the need for the

Crown Office—more than ever before—to be accountable to the House of Commons, and for the next Solicitor-General for Scotland to be a Member of this House, so that he can answer questions in this place?

Mr. Rifkind: The age of an Act of Parliament is not a relevant consideration in deciding whether a prosecution ought to be brought. If a prosecution has been brought, it is for the court to decide whether the Crown has proved its case. As the hon. Gentleman will be aware, the case to which he referred is still sub judice, as an appeal is presently before the courts.

Mr. Dewar: To some extent the Minister has made the point that I was about to make. The issue raised by my hon. Friend the Member for West Stirlingshire (Mr. Canavan) is important and we may well want to return to it, but, as an appeal is pending, the less said at this stage the better.

Mr. Norman Hogg: Does the Minister accept that the use of this kind of statute in industrial relations matters does not help to achieve a settlement, and that is what happened in this case? Will he give an assurance—

Mr. Speaker: Order. Both sides of the House have indicated that this case, about which I know very little, is sub judice. We should, therefore, observe our normal rules.

Animal Damage

Mr. Henderson: asked the Secretary of State for Scotland if the Lord Advocate has discussed with the Scottish Law Commission the legal problems of loss, injury and damage caused by animals; and if he will make a statement.

Mr. Rifkind: As I indicated earlier to my hon. Friend, the Scottish Law Commission is examining the law on civil liability for animals as part of its review of the law of obligations and will publish a memorandum in the next few months. My noble and learned Friend the Lord Advocate has not discussed the matter with the commission, but the Government will give careful consideration to its recommendations in due course.

Mr. Henderson: Does my hon. Friend recall that appendix B of the report of the working party on dogs in 1976 gave only the implications for English legislation? Will the Law Commission report, which we are now expecting, deal with the implications for Scottish legislation?

Mr. Rifkind: The Scottish Law Commission's consideration of this matter will cover all aspects of civil liability regarding injury as a result of actions by animals.

Sir Russell Fairgrieve: A particular problem regarding dogs is the number of puppies that must be put down after Christmas. Will my hon. Friend suggest to his colleagues that the time is well overdue for a draconian rise in the cost of the dog licence, which over the last two decades is the only licence whose price has not increased? Should it not go up considerably?

Mr. Rifkind: My hon. Friend will appreciate that this question relates to the responsibilities of the Secretary of State, but I note his comments.

Mr. Speaker: Mr. Tam Dalyell, to ask Question 32.

Mr. Dalyell: Not moved, Mr. Speaker.

Victoria Hospital, Kirkcaldy (Fire)

Mr. William Hamilton: asked the Secretary of State for Scotland if the Lord Advocate has yet received the procurator fiscal's report on the recent fire at the nurses' home at Victoria hospital, Kirkcaldy; and if he will make a statement.

Mr. Rifkind: An interim report of this tragic fire has been received from the procurator fiscal at Kirkcaldy. However, it will be some time before the full report will be completed and submitted to my noble and learned Friend the Lord Advocate. Every effort is being made to deal with the matter expeditiously. Until such time as the full report has been considered no statement can be made.

Mr. Hamilton: Does the hon. Gentleman recall that the former Solicitor-General for Scotland gave a strong indication that he was in favour of a public inquiry and that he would probably take it himself? For reasons well known to the House, the hon. and learned Gentleman is no longer in a position to do that. Will the hon. Gentleman assure us that there will be a public inquiry? If so, will the new Solicitor-General for Scotland take it, and, if not, who will?

Mr. Rifkind: As the hon. Gentleman will appreciate, no final decision on an inquiry can be reached by the Lord Advocate until he receives the report submitted to the procurator fiscal. Having said that, I would not dissent from the general principle of what the former Solicitor-General for Scotland said.

Mr. Harry Ewing: Does the Minister appreciate that there is grave concern in Fife about the circumstances surrounding this fire? Against that background, will he impress on his noble and learned Friend the importance of my hon. Friend's point about the need for a public inquiry—either a fatal accident inquiry or some other kind of judicial public inquiry?

Mr. Rifkind: I give the hon. Gentleman an absolute assurance that my noble and learned Friend is fully conscious of the great public concern occasioned by this fire. He will be taking factors of that type into account in coming to a decision on this issue.

Warrant Sales

Mr. Ancram: asked the Secretary of State for Scotland what representations the Lord Advocate has received about the use of the warrant sales procedure in Scotland.

Mr. Rifkind: My noble and learned Friend the Lord Advocate has received representations on this matter suggesting either that warrant sales be abolished or that the present system be reformed. My noble and learned Friend has also received copies of the Scottish Law Commission's five consultative memoranda published in October 1980. The commission's view, with which we agree, is that it would not be right, and indeed would be misleading, for it to submit a report on warrant sales in advance of a report on the other aspects of enforcement covered by the four other memoranda. I am assured that the commission is working on its report and regards its completion as its first priority.

Mr. Acram: Is my hon. Friend aware that a number of ratepayers in Lothian region have been threatened and

pursued by this arcane procedure for failure to pay their exorbitant rate demands? Is not that a moral abuse of this procedure, illustrating the total hypocrisy of the Labour group in Lothian region, which is always shouting about its interest in people's rights?

Mr. Rifkind: It is for the local authority to decide the appropriate way to pursue those who have not paid their rates. The whole subject of warrant sales, including the point raised by my hon. Friend, is now being considered by the Scottish Law Commission.

Mr. Dewar: I am grateful to the Minister for not following the personal vendetta of the hon. Member for Edinburgh, South (Mr. Ancram) against Lothian. I should like to press him about a reform of the law on warrant sales. We have been waiting for many years for the report on the law of diligence. While I welcome the fact that it is now to be a first priority, is the Minister aware that further substantial delay will bring into question the efficiency of our law reform procedures? When will the Law Commission be prepared to produce a considered statement?

Mr. Rifkind: I fully accept that there is concern in some quarters about this subject, and I certainly accept that there should be no substantial or unnecessary delay. The fact that the Scottish Law Commission has confirmed that the completion of this report remains its first priority should give reassurance to all who have taken an interest in the subject. I cannot give the hon. Gentleman a specific date, but, as the Law Commission will be treating this as its first priority, he can be sure that there will be no unnecessary delay whatever.

Lord James Douglas-Hamilton: As cases of hardship have been reported to the Scottish Law Commission, will my hon. Friend inform the commission that an early completion of its report will be welcomed?

Mr. Rifkind: The Government are as anxious as many hon. Members to hear the views of the Scottish Law Commission. This is an important and sensitive area, and I am sure that no one would want legislation to be rushed through in an ill-considered fashion. As soon as the Law Commission has made its recommendations my noble and learned Friend will give the fullest consideration to the proposals that are put forward.

Mr. McKelvey: Will the Minister give the House an assurance that he will ask electricity boards in particular and British Telecom not to use this medieval and barbaric way of securing debts in the meantime, because there are bound to be a large number of increased bills as a result of the heavy winter?

Mr. Rifkind: The hon. Member will appreciate that, as it was for local authorities, so it must be for electricity, boards and others to decide what means they use to pursue unpaid debts. I am sure that all public bodies and officials will take into account the effect on individuals of any action that they might take. However, the matter of the law is clearly one that must await the recommendations of the Law Commission.

Oral Answers to Questions — Questions to Ministers

Mr. Tam Dalyell: On a point of order, Mr. Speaker. It is an understandable tradition of the House


that right hon. and hon. Members do not read their questions, and on most normal occasions it is intolerable if they do so. There are certain delicate and difficult industrial situations involving thousands of jobs, such as the current position of Leyland and Bathgate, where it is sensible, if one is to have a serious answer, to give notice some hours before to a Secretary of State because the question may be complex and difficult. I therefore informed the Scottish Ofice. The difficulty in some situations is that if one were to repeat exactly the question of which one has given notice to the Secretary of State, who is geared to answer that precise question, it would involve reading it. I therefore apologise to the House if I have been discourteous, but that is the background to the matter.

Mr. Speaker: I am much obliged to the hon. Gentleman. We must keep to our rule that questions are not read; otherwise we shall change the character of Question Time in the House. I am sure that the hon Gentleman will bear with me when I say that he has the ability to memorise the substance of the question that he wished to put—

Mr. Dalyell: Not the exact words.

Mr. Speaker: Well, it was the substance that was important.

Mr. Christopher Price: On a point of order, Mr. Speaker. I wish to pursue the question, to which you briefly replied, about the change in the form of the Order Paper on this occasion, because it is an important issue of which the House should take cognisance. It is constantly emphasised by Prime Ministers of both parties that the Law Officers are independent and are not subject to any Department. The English equivalent of what happened today would be the Home Secretary purporting to answer questions tabled to the Attorney-General.
I do not criticise either you, Mr. Speaker, or any Officers of the House, but is it not a grave discourtesy on the part of the Government to prevent the House, by the ordering of questions, about which the Government know perfectly well, from scrutinising a Law Officer in carrying out his specific responsibilities by putting up a member of the Government who, by his very office, is quite unable to give the sort of responses to questions that a properly appointed Law Officer could give?

Mr. Dennis Canavan: Further to that point of order, Mr. Speaker. My question was the first question on the Order Paper to the Solicitor-General for Scotland today. I was not informed in advance that he would not answer it, or that it would be answered by one of the junior Ministers in the Scottish Office. This is the first time since I have been in the House that neither the Lord Advocate nor the Solicitor-General for Scotland has turned up for Scottish Question Time. I hear rumours that the five Scottish Tory advocates on the Government Benches are so out of touch or out of favour that the Government are likely to call in an outsider from the legal establishment in Edinburgh to take over the job of Solicitor-General. If that is so, would it be in order for the House of Commons to summon the Lord Advocate or the new Solicitor-General for Scotland to the Bar of the House at Scottish Question Time?

Mr. Speaker: Order. First, I remind the House that in 1974 the Secretary of State for Scotland answered this type of question. So the situation is not without precedent; it did happen in 1974.

Mr. Canavan: Before I was here.

Mr. Speaker: I was here. I can assure the hon. Gentleman that what I have said is factual.

Cardowan Colliery (Accident)

Mr. John Smith: (by private notice) asked the Secretary of State for Employment if he will make a statement on the accident at Cardowan colliery.

The Under-Secretary of State for Employment (Mr. David Waddington): It is with the greatest regret that I have to inform the House that there was an incident at the Cardowan colliery this morning, in which 25 miners were injured. I should like to express my deepest sympathy for the men concerned and their families, and I wish the men a speedy recovery.
The mine is about 7 miles outside Glasgow, and about 1, 100 men are employed there. This morning at 9 o'clock an ignition of gas occurred on a long wall coal face in the Cloven Seam—the reference number is V52. The face was in production and equipped with a modern power loader and powered supports. The seam thickness is 0·94 metres—38 inches—with a sandstone roof and a hard floor. Flame appears to have passed along the face during production operations. The power loader was about three-quarters of the way along the face.
There are 25 casualties, seven of which are stretcher cases. All have been taken to hospitals in Glasgow, suffering from various degrees of burns. All the men in the district have been accounted for and the ventilation re-established, but all work in the colliery has been suspended while the investigation proceeds. Investigation is proceeding by all the interested parties—the NCB, the NUM, Her Majesty's Inspectors—and the incident section for research and laboratory services division, Safety in Mines Research Establishment, Sheffield is on its way to the pit. There is no indication of the cause of ignition as yet.

Mr. Smith: I am sure that the Minister will appreciate how grateful I am to him for making such a full statement to the House. Speaking as the constituency Member, and on behalf of my many hon. Friends who have constituents working in this colliery, I wish to express sympathy for those who have been severely injured in the accident, particularly the seven men who are apparently in intensive care in hospital, and wish them a full and speedy recovery.
I pay tribute to the miners of this and other collieries, who daily risk life and limb to extract coal for the nation. Does the Minister accept that the institution of early inquiries into the cause of the accident will be universally welcomed? Will the findings be made known after the facts have been established? Does he agree that if the need for more safety measures is revealed by the inquiry, such measures will be introduced with all possible speed, so that the colliery can be kept as safe as possible for those who work there?

Mr. Waddington: I thank the right hon. Gentleman for his expressions of sympathy, which I am sure will give comfort to the families. I join in his expression of appreciation for the dangerous and important work that is done by miners. The findings of the investigation will be made available, and I assure the right hon. Gentleman that if the investigation reveals that further safety measures are required, they will be put into effect with no delay.

Several Hon. Members: rose—

Mr. Speaker: Order. I propose, exceptionally, to call the two hon. Members on the Government Benches and the four hon. Members on the Opposition Benches who have risen to their feet.

Mr. Alex Eadie: We join the Minister and my right hon. Friend in extending to the people who have been injured and the seven men who are in intensive care, and their wives and families, our hope and wish that they will make a speedy recovery. Does the Minister agree that the question and his statement are timely reminders of the hostile environment in which miners toil every day in the pits?
If the circumstances warrant it, and if the Secretary of State believes it appropriate, will the hon. and learned Gentleman return to the House and report any measures that are adopted, or the nature of any inquiry that is undertaken, because that pit has a history of being what we in the mining industry describe as a gassy pit?

Mr. Waddington: I am aware of the hon. Gentleman's knowledge of the mining industry, and it is appropriate that he should have risen today and said what he has. He is right in saying that what has happened today is a timely reminder of the dangers of mining, but I remind the House that our mining industry has a proud record. It has the best safety record in the world, and I am told that the accident statistics for 1981 will reveal that there were fewer fatalities in the mining industry in 1981 than ever before. I shall consider the hon. Gentleman's suggestion that when a report is available I should make a further statement to the House.

Sir Hector Monro: All Conservative Members, and especially those who have mine workers in their constituencies, will wish to be associated with my hon. and learned Friend's statement. Will he accept our wish that the injured recover speedily, and our thankfulness that there were no fatalities?

Mr. Waddington: There must be great consolation in the fact that there have been no fatalities. We can only hope that all those who have suffered injury will make a speedy recovery. I am grateful to my hon. Friend for his remarks.

Mr. Gregor MacKenzie: As a Member who is privileged to represent many colliery workers, I join my right hon. Friend the Member for Lanarkshire, North (Mr. Smith) and the Under-Secretary of State in expressing sympathy and good wishes to the injured for a speedy recovery. To allay any distress that might be caused, can the Under-Secretary of State tell us whether the entire colliery will be closed; and if so, the payment position of those who are laid off?

Mr. Waddington: The colliery will be closed while the investigation is carried out and until the cause of the accident is clear and work can be restarted. The men who are laid off will be entitled to the usual benefit, although that is not my province. I know that the right hon. Gentleman's expressions of sympathy for those who have suffered injury will be greatly appreciated.

Mr. Tim Eggar: I thank my hon. and learned Friend for a speedy and full statement and join in the expressions of sympathy made from both sides of the House for the miners and their families. Can my hon. and learned Friend assure us that any lessons that are learnt


from such an appalling experience as this will be drawn to the attention of the National Coal Board and that all necessary safety measures will be installed in other pits?

Mr. Waddington: I give my hon. Friend that assurance.

Mr. Dennis Canavan: As some of my constituents work at Cardowan and many more of the Cardowan miners are known to me personally, I join my right hon. Friend in extending sympathy to the injured men and their families. I hope that the victims of this tragic incident will make a speedy recovery.
What happened at this pit should be a timely reminder that, despite the great improvements in safety standards in the coal industry over the years, coal mining is still a dangerous, dirty and hazardous job. Conservative Members, who complain constantly that miners are overpaid, should go down pits such as Cardowan, as my right hon. Friend and I did, so that they can see the conditions for themselves. They would then agree with me that the miners are worth every penny that they can get.

Mr. Waddington: It is not appropriate now to make any political points. We are united in our expressions of sympathy and in recognising that mining remains a very dangerous job.

Mr. Dennis Skinner: Is the Under-Secretary of State aware that much concern has been shown by the National Union of Miners and other unions in the mining industry on the general question of the inspectorate? That was reflected in the parliamentary miners group putting down a question about the strength of the inspectorate in the coalfields. Many of us believe that it is below strength and that many additions must be made to bring it up to strength. I hope that the Under-Secretary of State will take the matter on board.
I associate myself with the remarks of my hon. Friend the Member for West Stirlingshire (Mr. Canavan). I remind the House that, despite the reasons put forward by the Minister for keeping it at a certain level, each miner who receives industrial injury benefit this year will lose £14 a week as a result of the Government's decision to stop earnings-related supplement.

Mr. Waddington: I shall deal only with the part of the question that relates to the inspectorate. There was an inspector at the pit when the accident occurred, although he had gone there for another reason. It is worth reminding the House that 11, 980 inspections were carried out at coal mines in 1980. In the light of that figure it is difficult to say that there is not an adequate level of inspection. There are 95 mines and quarries inspectors in post. The Health and Safety Executive is trying to recruit additional inspectors up to a total of 102 in 1982. There is no question of its being prevented from carrying out that recruitment programme because of any expenditure restraints.

Foreign Affairs Council

The Lord Privy Seal (Mr. Humphrey Atkins): With permission, Mr. Speaker, I shall make a statement on the progress of the discussions in the informal meetings of Foreign Ministers of the Community following the last European Council. I shall also make a statement on the Foreign Affairs Council that took place in Brussels yesterday.
On 25 January the Foreign Ministers had a lengthy discussion on the four key issues in the negotiations over the mandate that were remitted to them by the European Council. It was the third such discussion and I regret to say that it was not possible to reach agreement.
The main issue preventing agreement was the view of a number of other member States that the refunds to the United Kingdom should be arbitrarily and automatically reduced over time, regardless of the scale of the problem. We made it clear that we could not accept that. In the longer term we hope that the development of Community policies, including the reform of the common agricultural policy, will lead to a reduction in the size of our budget problem and we fully accept that, as that happens, our refunds should be reduced. What we cannot accept is a reduction totally unrelated to the underlying cause of our budgetary imbalance.
That was not the only difficulty. In addition, one or more of our partners had reserves on other aspects of the matters under discussion. For example, there was disagreement as to whether the duration of our budget refunds should be four or five years, with a review. There are also problems on agriculture where the formula proposed for controlling the milk surplus was very weak, and a number of countries, but not the United Kingdom, have reservations about the proposal that agricultural spending should grow less rapidly than the Community's resources.
It is disappointing that after so many rounds of negotiations we can still not reach agreement on the four key issues identified by the European Council, and therefore on the guidelines that were discussed there. But those are complex questions in which major national interests are involved and we never thought that it would be easy to find solutions that would enable each country to feel that it had a reasonable deal. I welcome the intentions of the President of the Council and the President of the Commission to try to find solutions to those problems. We hope they will be able to do so quickly.
To turn to the Foreign Affairs Council, it was decided to end further sales of food to Poland at specially subsidised prices and to use the funds originally earmarked for such sales for humanitarian aid, including food, through non-governmental organisations. There was a wide measure of support in Council for the proposal that the USSR should be upgraded from the "intermediate" to the "relatively rich" category in the OECD export credit concensus. The matter is to be considered further by the Committee of Permanent Representatives tomorrow, when I hope that it will be agreed that the Community should propose such an upgrading to its OECD partners. The Council also instructed permanent representatives in conjunction with the Commission to study the trade policy measures that the Community might take against Soviet


exports to the Community and the implications of the undertaking by the Ten on 4 January not to undermine measures taken by the United States of America.
The Council considered the problem that has arisen over the adoption of the 1982 budget. In the view of member States, the European Parliament has not acted correctly over the classification of expenditure and the maximum rate of increase. No final decisions were taken, but it appears to be the view of most member States that as well as opening a dialogue with the European Parliament with a view to resolving the problem by mutual agreement they should, as a precautionary measure, place the matter before the European Court to determine the legality of those parts of the budget about which there is doubt.
I am glad to say that the Council agreed that the storage levy and refund scheme applicable to sugar from African, Caribbean and Pacific States should be suspended for three years, to the benefit of the cane refining industry. In those circumstances, I was able to agree to a revised Commission negotiating mandate on the price to be paid for ACP sugar for 1981–82. I hope that that will enable the present disagreement between the Community and the ACP to be resolved.
My hon. and learned Friend the Minister for Trade represented the United Kingdom for discussion by the Council of policy on imports of low-cost textiles. It was agreed that, to allow work to be completed on calculating the global ceilings, decisions on the various outstanding issues, including the terms for Community participation in the new multi-fibre arrangements, should be held over until 11 February, when there will be a further special meeting of the Council.

Mr. Eric S. Heffer: Is the right hon. Gentleman aware that the Opposition support the Government in all their efforts to ensure that Britain's contribution is fair and equitable, and also on the stand that they appear to be making? I say "appear", because the right hon. Gentleman's statement is by no means as forthright as that made by the Foreign Secretary, which was reported in The Times on 26 January. According to that report, he referred to the Community's agricultural prices and said:
I do not see anything can be done until we have a solution.
What, precisely, does that mean? I trust that the Government intend to adopt that stance. Too often we hear tough statements from the Government, only to discover that they mean very little. Ultimately, there have been compromises which, in the long run have not been satisfactory to the British people and which have added to their burdens.
The Foreign Secretary has not been as forthright this afternoon in the other place as he was reported as being in The Times. What precisely do the Government mean by the statement? Will they make a stand and ensure that no agreement is reached on agricultural prices—which could mean an extra 10·5 per cent. for the British people—or on other matters until a solution has been found to the problem? For a long time we have staggered from one crisis to another. The British public are pretty fed up with the farcical trips made to Brussels to try to solve the problem. That problem has never been solved satisfactorily.
If the Government are serious, will they do anything about VAT payments? Have they considered other action,

such as withholding Customs payments? That is pretty drastic, but we must know whether the Government are serious. The House and the country want a clear statement from the Government that this time they mean what they say and will not agree to anything until they have obtained a solution that is satisfactory to the British people.

Mr. Atkins: I thank the hon. Gentleman for his support of our position. It was unexpected, but most agreeable.
The hon. Gentleman asked me about what my right hon. and noble Friend the Foreign Secretary had said about agriculture. The position is simple. The mandate agreed by the Heads of Government on 30 May linked three areas in which progress had to be made: non-agricultural expenditure, agricultural policies and the budget. The Heads of Government and all the countries involved agreed that those three had to go forward together. There has been no departure from that. Until we have found solutions for all three, we cannot move on any of them
The hon. Gentleman said that we had made tough statements but reached compromises. I remind him of what happened in 1980, when we had discussed our contribution with the Community. In case the hon. Gentleman has forgotten, I remind him that the arrangements that we were eventually able to make resulted in a far better return than anything that his Government negotiated? We are on the same point now, and I have no doubt that we shall achieve what we want.

Several Hon. Members: rose—

Mr. Speaker: Order. I propose to allow 20 minutes for questions on the statement, but I remind the House that there is a Ten-Minute Bill to follow and that many hon. Members wish to speak in the debate on employment.

Sir Anthony Meyer: Is my right hon. Friend aware that there will be general support for the Government's stand, that the question of budgetary refunds must receive not an arbitrary, but an organic solution, which is connected with the Community's progress? Does my right hon. Friend agree that the Government's ability to win acceptance for such an approach would be greatly strengthened if other Departments adopted the energetic attitude of the Foreign Office, which seeks to promote common policies within the Community?

Mr. Atkins: The Government seek to improve the way in which the Community works in relation to agricultural and non-agricultural policies, as well as the budget. I am glad that my hon. Friend supports our position. We have consistently argued with our Community partners that to discharge the mandate agreed by all Heads of Government—that unacceptable budgetary situation should not be allowed to recur—we must produce solutions that stop that from happening. A system under which our refunds fall automatically every year—whatever happens to the rest of the Community's budgetary arrangements—will not necessarily prevent unacceptable situations arising. That is why we stood out against the proposal that that should happen. We believe that the Community's policies will change and that it will spend more, for example on the regional and social funds than before. That may help to solve our problem, but until we know that, we cannot agree to what, in Community jargon, is called "degressivity".

Mr. Russell Johnston: How helpful has the Commission been on the budget, and to what extent does the Government's view differ from that of the Commission? Is the right hon. Gentleman aware that Liberals believe that to link disapproval of general Jaruzelski's regime, martial law and so on with food aid is unconstructive, unhelpful and, almost certainly, ineffective?

Mr. Atkins: The Commission is well seized of our view and seeks to bring forward proposals to deal with the matter, but in the Council we are dealing with the other member States.
I repeat that the Community has decided to end the system of selling food to Poland at a discount, with the Community making up the balance. We have agreed to use the money to send food and other humanitarian aids to the Polish people, not through the military Government, but through non-governmental organisations, such as the Church, the Red Cross, Caritas and so on.

Mr. Jim Spicer: My right hon. Friend gave us one piece of good news about the ACP sugar agreement, but can he spell out in a little more detail what it will mean for the United Kingdom sugar refining industry and, over the next three years, for Commonwealth sugar producers, who depend so much upon it?

Mr. Atkins: The suspension of the storage levy will make a considerable difference to United Kingdom cane sugar refiners. As my hon. Friend knows, it mainly involves only one firm, employing about 3, 000 people. It will help to preserve those jobs.
In the discussions that are to take place I believe that our Commonwealth partners will feel that the offer of an increased price will meet their case.

Mr. Nigel Spearing: Does the Lord Privy Seal recall that about 10 years ago it was said consistently from the Labour Benches that the system of own resources which the EEC is adopting and to which this country would be bound would mean a permanent and continuing deficit on the EEC budget for Britain, and that his hon. Friends said that the Community would change? Who has been proved correct?

Mr. Atkins: The thrust of our arguments with our Community partners on agricultural policy is to reduce the proportion of Community money spent on agriculture in relation to the Community's resources. That is essential. The Community should devote itself more to matters connected with the social and regional funds—relieving unemployment, helping young people and so on. That is the line that we have pursued. It may not be surprising that there have been objections from basically agricultural countries, but we intend to pursue that line, because we believe that it is right.

Mr. Teddy Taylor: As Britain has already contributed over £3, 000 million more to the EEC than we have received—over £1 million a day net—will my right hon. Friend make it clear to the Community that, in the absence of a rebate agreement, we will not and cannot afford to make the massive payments next year? Although in 1980, after the invasion of Afghanistan, our exports of subsidised food to the Soviet Union broke all

previous records, in view of the Polish situation, will our exports of cheap subsidised food to Russia be reduced this year?

Mr. Atkins: That is precisely what we have invited the permanent representatives to study, along with other trade matters concerning Russia. I hope that they will produce a comprehensive list so that we can consider how to handle our future trade with Russia.
I cannot tell my hon. Friend what the current year's contribution to the EEC will be, but our contribution in 1981 works out at not £1 million a day, but about £1 million a week.

Mr. Christopher Brocklebank-Fowler: I support the Government's firm stand on the Community budget negotiations generally, but can the right hon. Gentleman assure the House that the part of his statement relating to the agricultural budget does not mean that Her Majesty's Government alone among Community Governments favour a reduction of Community support for her own agriculture?

Mr. Atkins: I said that we believe that expenditure in the Community budget on agriculture is too great and should be reduced in certain areas. We have tried to shift the weight of expenditure from being predominantly agricultural to the other areas that I mentioned, as is right. Many of our Community partners agree with that, although those who derive the greatest benefit from the current arrangement are less than enthusiastic.

Mr. Hugh Dykes: As our budgetary contribution has been only about £1 million a week net, should we not keep the problem in perspective? Given the necessary economic revival in Britain, in a few years' time might the problem not appear far less serious?

Mr. Atkins: That is what we all very much hope. In 1980 my right hon. Friend the Prime Minister negotiated an arrangement to ensure that our contributions were not excessive. The arrangement applied in 1980 and 1981 and can—and will, if necessary—be extended to 1982, but we are seeking a more permanent arrangement to ensure that Britain, which, unhappily, is not the richest member of the Community, is not the largest contributor. We shall continue to seek a more permanent arrangement of fairer contributions.

Mr. K. J. Woolmer: In the MFA talks, did the right hon. Gentleman make it clear to the other Ministers that the proposal to base the future growth of imports on 1982 quotas rather than on the existing level of trade would cause substantial further damage to the industries and was unacceptable to both the employers and the trade unions? If the Government intend to withdraw from the MFA in the event of unsatisfactory bilateral negotiations, may we know what the deadline is for the negotiations this year? Will the Minister of State concerned come to the House on 11 February so that we can properly question him?

Mr. Atkins: My hon. and learned Friend the Minister for Trade has consistently made the point about the basis of future growth to our Community colleagues, and he will continue to do so. The Commission is under instructions to report back on the bilateral negotiations—which have not yet started—by the beginning of September. For the present discussions, certain global figures have only just been received by the Commission and we are studying


them. They will be considered again at the meeting on 11 February. My hon. and learned Friend has kept the House informed on the progress of the discussions and, as appropriate, he will continue to do so.

Mr. Tim Renton (Mid-Sussex): In view of the disappointing nature of the recent Council of Ministers' meeting, what will break the log-jam and bring about the fundamental reform of the CAP and the long-term review of Britain's budgetary contribution, which many of us who fully support our membership regard as essential.

Mr. Atkins: In the end, I believe that it will be the realisation by our partners that our case is unanswerable.

Mr. David Ennals: I understand the desirability of food aid to Poland going through non-governmental channels, but does it mean that voluntary organisations such as the Salvation Army and the Ockenden Venture, of which I am chairman, will get additional assistance to perform the important task of helping the Polish people at a time of great difficulty?

Mr. Atkins: We have instructed the Commission to examine the best ways of getting the aid to the Polish people. As I said, a certain amount of money was set aside in the Community originally to subsidise the sale of food to the Polish Government. It is now planned to use it in the way that I have described. I cannot say at present precisely how it will be done, but the Commission is actively seeking the best methods of ensuring that the aid gets to the people who really need it, and not just to the Polish Government. That is the important point.

Mr. Tony Marlow: Would my right hon. Friend like to take the opportunity to correct his slight slip of the tongue about our contribution to the Community being about £1 million a week? Is he aware that a recent Treasury answer stated that net cash disbursements this year to Brussels would be £500 million a year, which is £10 million a week? Will he tell his Community colleagues that as long as the bulk of Community funds are expended on the CAP neither the House nor the British people find it acceptable to make a significant net contribution to the Community budget?

Mr. Atkins: The figure that I gave was correct. Our net contribution after the adjustments that follow the arrangements arrived at by my right hon. Friend the Prime Minister will amount to approximately £55 million for 1981. That is marginally over £1 million a week, but only just.

Mrs. Shirley Williams: Does the Lord Privy Seal think that the entry of Mediterranean producers to the Community will provide a chance to change the basis of the common agricultural policy, so that it is more likely that we can control the ultimate budget?

Mr. Atkins: Yes, Sir. The arrival of Mediterranean producers inevitably means a change in the way that the common agricultural policy works. That has also been under discussion. Those countries have different problems from those of more temperate producers. As the right hon. Lady knows, we are convinced that far too much of the Community budget is spent on agriculture and not enough on other matters, particularly the social and regional funds of the Community.

Mr. Sydney Chapman: However disappointing the outcome of the meetings on which my

right hon. Friend has reported may have been, will he recognise that there will be wide support for his stance in insisting that the massive budget reductions negotiated by the Prime Minister should not be reduced, at least until the common agricultural policy has been reformed? Given the way in which our trade has increased with other EEC countries in recent years and that our visible balance of trade is now in surplus, and provided that we can get our budget contribution correct, there are wide economic advantages to be had from our belonging to this great home market.

Mr. Atkins: About 43 per cent. of our trade is now with our European partners. It is recognized, not only by the Government but by all the other Heads of Government who were assembled at the European Council meeting on 30 May, that there should be adjustment and reform in three areas of Community activities—the non-agricultural policies, the agriculture policies and the budget. That was agreed by the Heads of Government. What we have been seeking ever since—and are continuing to seek—is the method of implementing that agreement.

Mr. Leslie Spriggs (St. Helens): Will the Lord Privy Seal inform the House, in view of the agreement reached by the Prime Minister on Britain's budgetary contribution to the EEC, what will happen next year, after that agreement ends later this year? What will follow the present agreement between the Prime Minister and the EEC?

Mr. Atkins: That is precisely what we are negotiating.

Mr. Kenneth Carlisle: Does my right hon. Friend agree that the satisfactory level of refunds over the past two years resulted from our tenacity over several meetings? Will he therefore reassure the House that this time the Government will show similar tenacity to secure a long-term solution to our contribution problem?

Mr. Atkins: I give my hon. Friend that assurance. It takes a long time to reach a solution, and much discussion and patience with our Community partners, which was shown in 1980, and is being shown by Her Majesty's Ministers now.

Mr. James Lomond: Will that determination to stand resolutely shoulder to shoulder against the Soviet Union and trade with that country extend to expecting the West German Government, the French Government and the other Governments of the EEC, who are scrambling to sign the same sort of agreements, to cancel their agreements to buy many hundreds of millions of pounds' worth of natural gas from the Soviet Union, or, as usual can we expect self-interest to prevail?

Mr. Atkins: I cannot give the hon. Gentleman a categoric answer. We are currently exploring in detail through our permanent representatives in Brussels, the areas where we can act together and persuade, and perhaps be persuaded by our Community partners to join in the kind of action that the hon. Gentleman has described.

Mr. David Myles: Although, as a farmer, I regret the delay that may be caused to the annual agricultural price-fixing, I congratulate my right hon Friends on the robust stand that they have taken in defence of the nation's interests. May I urge my right hon. Friend to ensure that in any agreement that is made our agriculture


industry is in no way disadvantaged? Our agriculture industry has set an example to the other agriculture industries to such an extent that we are now suffering from surpluses, whereas Poland and the Soviet Union are suffering from dreadful scarcities.

Mr. Atkins: I give my hon. Friend the assurance that he seeks. We are seeking to act in defence of the interests of the whole country, including the agriculture industry, which is a much better example of how an agriculture industry should be run than anything east of the Iron Curtain.

Mr. Heffer: I should like to explore a little further the point made in the Lord Privy Seal's statement about Poland. He referred to the undertaking by the Ten 
not to undermine measures taken by the United States.
Will the right hon. Gentleman confirm that that in no way implies that we are accepting a policy that could undermine detente and peace in Europe? Will he make it clear that the British Government, while taking every sensible step with regard to Poland, will not go as far as anything that could undermine peace?
In answer to a question by his hon. Friend the Member for Mid-Sussex (Mr. Renton) the right hon. Gentleman said that our case was unanswerable. That may be so to us, but it may not be unanswerable for our nine Community partners. If they do not find our case unanswerable, what do we intend to do? Are we serious this time, or will we again end up with a compromise so that we do not reach a permanent solution, which the Prime Minister unfortunately failed to obtain in 1980, despite all the brave words at the time?

Mr. Atkins: The hon. Gentleman is making a mistake to attack my right hon. Friend the Prime Minister for what she did in 1980. The agreement was of great benefit to this country than anything ever done by the Labour Government. We are determined to reach an agreement with our colleagues. We believe that our case is unanswerable. At any rate, no one has answered it yet. It is not surprising that we are taking a long time. Each country has its own national interests to consider. If we continue to argue our excellent case, eventually—I cannot tell the hon. Gentleman when—our European partners will agree on the justice and logic of our case and come to an agreement with us.
The hon. Gentleman also asked about Poland. As I said in my statement, we are studying the implications of the undertaking by the Ten, which was given at the meeting on 4 January, not to undermine measures taken by the United States. Much careful consideration is required on how we should proceed. However, I can easily give the hon. Gentleman the assurance that it is in our minds that the prior necessity is to preserve the peace of the world.

Local Authority Finance (Education Costs) (Report)

Sir Brandon Rhys-Williams: I beg to move, 
That leave be given to bring in a Bill to require the Secretary of State to carry out a further review of the reform of local authority finance; to prepare proposals for the introduction of a special rate support grant to bear the full cost to local authorities of providing public education; and to report to Parliament not later than 31st July 1982.
The House has had acrimonious discussions recently on local authority finance. I am seeking leave to introduce a Bill to deal with the cost of education and to ask for a report on that subject before the House rises for the Summer Recess.
Although there is much controversy over local authority finance, there is general agreement on both sides of the House on the need for a major reform of the present rating system. The plain fact is that over the years Parliament has placed burdens on ratepayers that are greater than they can bear. We have recognised that fact in that we agree that we must accept a large part of the cost of local government expenditure as a charge on the national budget.
If we consider services that are analogous to education, we see that the decision has been taken already. I am thinking of the services that we provide to pensioners, particularly the payment of pensions. I am also thinking of the National Health Service. These services are now accepted as proper to be paid for mainly by central Government. But although education has become a national service with, to a great extent, nationally regulated standards, it is still administered locally and the ratepayers contribute a net figure—as I calculate it—of at least £4, 000 million to £5, 000 million. That is much too heavy a burden to continue to place on the rates. It is an item of expenditure which has to be brought on to central Government resources.
I have already advocated on a number of occasions that the entire cost of education should be taken over by central Government. The Government's recent Green Paper looks at this possibility in annex B. This is the reform that could be implemented most quickly and simply of all the possibilities that are analysed in the Green Paper. It should have the general effect of halving the rates in one single reform. There is much still to be said about the responsibilities of ratepayers in respect of other services, but I hope that I shall have the agreement of the House that the time has come for education to be made a genuinely national service.
If the burden of finding the money for education fell on to income tax instead of on the rates, it could be said that what the ratepayers would gain the income tax payers would lose and that there would be no significant difference. But there would be a significant and worthwhile improvement in the way the burden of the cost of education would be spread. The reform would bring help precisely to those ratepayers who are finding the rates most onerous, that is, those on the lowest incomes.
Inevitably in making a recommendation of this kind one is bound to arouse consideration of the future of education policy. I am not in this Bill seeking to do that. I am not trying with this reform to change the total amount spent on education, only to spread the cost more acceptably.


Annex B to the Green Paper deals with various options that could be adopted by the House to implement the reform. First, education could be made entirely a central Government responsibility and taken away altogether from local authorities. That would be highly controversial and there would be little support for it on either side of the House. So I would not suggest pursuing that idea.
A proposal that has often been recommended, and which has something to be said for it, is that teachers' salaries should be paid for centrally, but that local authorities should remain responsible for the rest of the cost of education. I have thought for some time that this was an attractive and reasonable suggestion, but I note that the Green Paper says that it would probably prove unsatisfactory.
As for the third possibility, which is dealt with in the annex, the introduction of a special education block grant, I shall not take up the time of the House by reading the whole section of the Green Paper. It is only 10 to 12 lines and I had intended to read it; but I will leave it to hon. and right hon. Members who are interested in the idea to look at it. It puts the proposal succinctly. In effect, it would mean that Government would introduce a special block grant that would bear the whole or a large part of the national education standard cost, but local authorities would still be free, within reason, to add to that if they chose. That would be a matter between them and their ratepayers.
The purpose of my Bill is to add urgency and direction to the consideration of the Green Paper and to show the strong feelings of the House that reform is overdue. Because of the rules of order, I have not been able to bring in the Bill in such a form as would implement the proposal in due course on the passage of the Bill, but I am content that the House at this stage should simply ask for a further report, supplementing what is written by the Government in the Green Paper.
To prevent any delay, however, I have specified in the long title that the report should be presented to Parliament by 31 July this year. That gives a reasonable length of time. I hope that the House will make it clear to ratepayers that something positive has to be done before the Summer Recess and that hon. Members are aware of it. Then we would still have time to introduce a major reform of the rates in the lifetime of this Parliament. That is my aim and I hope that the House will give me leave to introduce my Bill.

Question put and agreed to.

Bill ordered to be brought in by Sir Brandon Rhys Williams, Mr. Tom Benyon, Mr. Peter Bottomley, Mr. John Hunt, Mr. Michael Shersby, Mr. Martin Stevens and Mr. John Wheeler.

LOCAL AUTHORITY FINANCE (EDUCATION COSTS) (REPORT)

Sir Brandon Rhys Williams accordingly presented a Bill to require the Secretary of State to carry out a further review of the reform of local authority finance; to prepare proposals for the introduction of a special rate support grant to bear the full cost to local authorities of providing public education; and to report to Parliament not later than 31st July 1982: And the same was read the First time; and ordered to be read a Second time upon Friday and to be printed. [Bill 55.]

Employment Situation

The Secretary of State for Employment (Mr. Norman Tebbit): I beg to move, 
That this House, greatly concerned about the difficulties facing those who cannot find jobs, supports the Government's policies which are helping to make British industry more competitive and which therefore offer the best prospects of a permanent improvement in job opportunities for people in this country.

Mr. Speaker: I have selected the amendment in the name of the right hon. Gentleman the Leader of the Opposition for the main debate.

Mr. Tebbit: The Government were clear that the House would wish to have this early opportunity to discuss the employment situation.
There can be no doubt that we stand on common ground in our attitude to and in our feelings about the plight of those individuals, the people who make up the unemployed, those sad statistics, and their families. None of us can have any doubts or differences about the problems which unemployment can bring, even though there is now, of course, a comprehensive safety net of the sort which did not exist in the past.
Nor can there be any disagreement that the 3 million unemployed in this country represent a tragic waste of our human resources—something which none of us can contemplate with other than deep regret. We all want to improve employment prospects for our people and we all have every reason to do so.
Regrettably we can agree across the Floor of the House on not much more than that. Indeed, apart from the fact of 3 million unemployed, the Opposition are hardly willing to agree the facts. So in an effort to extend that common ground let us try to establish some facts.
Are the Opposition today ready to deny that there is a world recession and that that has been brought about by the succession of oil price rises? Do they believe that we can insulate ourselves from the impact of that recession?
I must say that if the Opposition line is, as it has so often been recently, that it is solely Government policies that have brought unemployment to its present level, they will have to explain how it is that President Mitterrand's France has 2 million unemployed or West Germany 1·7 million—their highest figures since the early post-war years.

Mr. D. N. Campbell-Savours: It is not Mitterrand's France; it was d'Estaing's France. Mitterrand has been in office months only.

Mr. Tebbit: The hon. Gentleman is anxious, as always, to push the blame on to somebody else. President Mitterrand's France and Germany have, in addition, conscripts in the army which, of course, takes them out of the labour market. Germany has almost a quarter of a million conscripts; France has well over 200, 000. Germany's foreign labour farce fell by half a million between 1973 and 1978.
Indeed, in Germany, Holland and Sweden unemployment has increased by about 50 per cent. in the past year, and in the last few months unemployment has been rising faster there than in Britain. Surely not even Opposition Members can argue that those rises stem from the policy of this Government.

Mr. Donald Stewart: If, as the right hon. Gentleman claimed, the effect of Government policies on unemployment is minimal, does he agree that the Saatchi and Saatchi posters before the election were completely dishonest?

Mr. Tebbit: No. What I am saying is that no one can pretend that the increase in unemployment in Britain in the midst of a world recession is solely the Government's responsibility.
During the first 32 months of the present Government's time in office oil prices have risen from about $15 to about $34 a barrel. During the equivalent period the Labour Government suffered a rise of about $2 a barrel. I have the figures here. The world economic position was very different then compared with what it is now.
Any Government is affected by events outside the country. In recent months there has been an extremely large increase in unemployment in other countries. It is a common problem.

Mr. Geoffrey Robinson: Does the Secretary of State know of any set of forecasts for unemployment in countries comparable to ours showing unemployment rising to 3 million-plus? Does he think that any other Government in Europe would allow those figures to be attained?

Mr. Tebbit: I do not speak for the forward policies of other Governments in Europe. I am speaking for what is actually happening in Europe, not for the forward policies of other Governments. Whatever their policies are, they all face extremely rapid rises in unemployment. The sole exception at present, perhaps, is Japan, which has done extremely well. [AN HON. MEMBER: "What about Austria?"] I shall give the figures for Austria, and I shall give the figures for France, which has managed to suppress the rise in its rate of unemployment for the moment, but has an increase in its unit labour costs of no less than 13 per cent.—with all that that implies for the future.

Mr. Frank Hooley: (Sheffield, Heeley) rose—

Mr. Tebbit: I shall not give way to the hon. Gentleman. I have already given way sufficiently.
We had other long-lasting and deep-seated problems which some of our major competitors did not fully share. [AN HON. MEMBER: "Rubbish".] I should be obliged if the hon. Gentleman would listen to what I have to say and then decide on the merits of the case instead of on his own blind prejudice.

Mr. Peter Shore: The Secretary of State was on a very important point when he spoke about the effect of oil prices. Nobody would deny that they are very important. The right hon. Gentleman pointed out that they had doubled in 1979–80, and we accept that, but he denied, implicitly or explicitly, that they had risen in previous years. Will he confirm that oil prices rose by four times between 1973 and 1974, and, furthermore, that his right hon. Friends in Opposition never drew attention to that in any economic debate?

The Prime Minister (Mrs Margaret Thatcher): We did so many times.

Mr. Tebbit: If the right hon. Gentleman checks the figures, he will find that the price of a barrel of oil—

Dr. John Cunningham: Oil prices rose by four times.

Mr. Tebbit: I wish that the hon. Gentleman would not act as a juvenile parrot. I heard the right hon. Gentleman's question, and I am answering it. There is no need for it to be parroted by the hon. Gentleman. I am telling the right hon. Gentleman, in the intervals between the hon. Gentleman's discourtesy, that the price of a barrel of oil was $9·60 when the Labour Government came into office. Thirty-two months later—the same span as this Government have had in office—it had risen by about $2. In the equivalent period of the present Government's time in office the price has risen from less than $15 to about $34 a barrel.

Mr. Shore: What the right hon. Gentleman is saying is absurd. It is torturing figures to the point of lunacy. It is true that in the period that the right hon. Gentleman is describing, beginning in March 1974, the price rose in that way, but the Labour Government came to power three months after the quadrupling of oil prices. The right hon. Gentleman must address his mind fairly to that fact.

Mr. Tebbit: The right hon. Gentleman is fond of using statistics for his Government's period in office, and I am giving him figures for the same period.
Who, even among the Opposition, would deny that much of our industry when the present Government came to office was and had been for some time, as had our commerce and our local and national Government, both inefficient and overmanned? It is possible to take examples from where one will. I ask hon. Members to read again the Central Policy Review Staff report on the motor industry, to look at how manning levels have now fallen in the steel industry, and to ask whether it would not have been better had those manning levels been achieved five years, three years or even two years earlier—and, in particular, achieved without a damaging and needless steel strike.
I ask hon. Members to ask managers throughout the country what has been happening to the efficiency of their firms. Indeed, if hon. Members want to see what problems still exist, they should take an independent view and read what Paul Routledge said in The Times yesterday. Referring to what is going on in British Telecom, he quoted the chairman on a catalogue of labour inefficiency as follows:
Out of date methods of work; 'over 40 per cent. of field supervisors' time is spent on paperwork'.
Inter-union arguments on operating computer terminal…Time-wasting in putting in telephones.
All those matters, which are, regrettably, typical of the overmanning and inefficiency which have characterised much of British industry in the past, have been largely rooted out now in the private sector, but we still, unhappily, have a long way to go in much of the public sector.

Mr. John Golding: Does the right hon. Gentleman understand that the increase in productivity in British Telecom since 1970 has exceeded that of almost any other industry? It is certainly higher than anything achieved in the private sector.

Mr. Tebbit: I quote again:
staff levels and wages grew by 18 per cent in 1979–80 and by 31 per cent. in 1980–81, 'far outstripping growth'
That makes it very difficult to achieve increasing levels of productivity.
When the recession struck Britain, we had hardly begun to face the stored-up problems of years of poor industrial


performance: years of stunted and inadequate growth in productivity and years of excessive growth in wages compared with productivity—that is, years of uncontrolled increases in unit labour costs.
I have quoted the figures before, and no doubt I shall do so again. 1 despair of the Opposition's understanding them, but at least they might remember them.
Between 1970 and 1980 money incomes rose by 345 per cent. and output by 17 per cent. Prices rose by 188 per cent. and unemployment rose by 193 per cent. That could qualify for the description of a dismal decade.

Mr. Michael Foot: Ask the right hon. Member for Sidcup (Mr. Heath) about those figures.

Mr. Tebbit: The right hon. Gentleman may choose to use different figures, but those are the figures published by the Central Statistical Office. [Interruption.] Does the right hon. Gentleman want to dispute the basis of official statistics that were issued when he was in Government? He does not. The right hon. Gentleman has a new system. He disputes the official figures issued by Conservative Governments, not those issued by Labour Governments.
For more than five years of that decade, let me emphasise, we enjoyed, if that is the word, the policies of Tweedledum Foot and Tweedledee Williams. Between them, ably assisted by the right hon. Member for Bristol, South-East (Mr. Benn), although, to be fair, hampered from time to time by the happy and sometimes successful partnership of the IMF and the right hon. Member for Leeds, East (Mr. Healey), they left our industry set up to be the fall guys of the world as the recession bit.
Unemployment was still falling as a consequence of the policies of the IMF years, but inflation was already being stoked up again. Inevitably, as the recession struck, unemployment rose, exacerbated by our lack of competitiveness. Through that decade of decline, each recessionary trough was marked by a new peak of unemployment.
None of this should have come as a surprise, because what was happening was clear all the way through. There are those who still believe that we could have fudged our way through this recession, as we have with others, and let the British disease run its course until the sick man of Europe became the pauper of Europe.
For the Conservative Government that is not an option. It would perhaps have been easier to tackle these accumulated problems without the added dificulties of the recession. But we had no choice. The recession was there and the old problems had to be met. Without tackling the old problems of poor product design, poor marketing, slow delivery, unnecessarily high costs and inflexible use of manpower—

Mr. Foot: indicated dissent.

Mr. Tebbit: Does the right hon. Gentleman think that those problems did not exist or that they should not be tackled?

Mr. Foot: The right hon. Gentleman is not fit to answer for any Government; not even this Government.

Mr. Tebbit: Although that may be the view of the right hon. Gentleman, it was not the view of the electorate. What is more, having lost 25 members of his party in the last two years, he should keep quiet.

Dr. David Owen: Is the right hon. Gentleman aware that he has been speaking for 15

minutes and that we have not yet had a constructive proposal about the serious problem of unemployment? We have had a long catalogue of scapegoating and party politics. When will the right hon. Gentleman address himself to the real problem?

Mr. Tebbit: The right hon. Gentleman must be fully aware that attempting to deal with problems without first going into their background is most unwise. If he, as a doctor, treated his patients without first diagnosing their problems, then I can see why he came to the House of Commons.
There is little doubt that there can be no prospects of a recovery which would lead to new, better paid, more secure and more productive jobs unless we tackle the problems that I have listed. Some of the problems are undoubtedly on the manpower front. They have to be tackled. Would British Steel be the better if it returned to the manning levels of 1979? Would British Leyland's chance of survival be enhanced by going back to the overmanning of three or five years ago?
We have removed some of the barriers to progress to that end. The Employment Act 1980, the new initiatives on reforming training, the Government's support for training in new technologies, and our moves to get more realistic wages for young people have helped to that end. We have improved the incentives for entrepreneurs by creating new schemes of encouragement and help for small businesses. It is managers and work forces who will take advantage, and are taking advantage, of the chances and the incentives to improve the performance of their firms.
It is in the interests of Opposition Members to claim that the economy is heading downhill. They enjoy it, they love it, they sit and giggle at it, but it is clear that the trough of the recession was passed in the second quarter of last year. In the three months to November, industrial output rose by 1½ per cent. and manufacturing output by 1 per cent. Perhaps most important of all, output per man hour in manufacturing rose by 8 per cent. between the fourth quarter of 1980 and the third quarter of 1981. Output per head rose by 10 per cent. over the same period.
At last, we have begun to gain on our competitors in terms of unit labour costs. At last, we have seen a year in which our unit labour costs rose less than 4 per cent. against over 5 per cent. for our main competitors. In Germany it was 4 per cent., in Japan it was 6 per cent. and in France it was 13 per cent. if 13 per cent. in France is not good news for any motor manufacturer other than Renault and the other French companies, I do not know what is.
At last, after years of decline, our international competitiveness is being regained. The gains are showing through in, for example, an increase of more than 20 per cent. in engineering export orders in the second half of last year. No one outside the Opposition pretends that there is an instant solution to the problems. Equally, it is only the Opposition who resolutely refuse to give any weight or credence to the indicators—the measurements—of what is going on in the economy and the extent to which they are pointing to and recording a recovery from the trough of recession.
Obviously, output is one measure, but, perhaps of critical importance to unemployment, the figures for short-time working are falling and the figures for overtime working are rising. This month, for the third month running, we have seen figures for unfilled vacancies


higher than those for the same month a year earlier. The numbers of vacancies notified to the jobcentres and to my Department have been rising since April 1981. That trend line of vacancies has always led the unemployment figures, both up and down, and after some hesitation it now seems to be established on a firm upward trend.

Mr. J. Enoch Powell: If the right hon. Gentleman is leaving the topic of competitiveness, I wonder whether he would address himself to a problem that worries many people. We have a persistent and massive surplus on our trading account. That being so, the effect of an increase in our international competitiveness must be an increase rather than a decrease in unemployment.

Mr. Tebbit: That is not necessarily so. As the right hon. Gentleman rightly hinted, the effect would be an upward pressure on sterling. That would have a favourable effect on the inflation rate and perhaps allow us to have lower interest rates than would otherwise be possible. That could then begin a benign spiral of holding down costs and might allow us to live better rather than worse as we have been doing in recent years.

Mr. John Grant: rose—

Mr. Tebbit: I should get on.
Amidst the tragedy of 3 million unemployed we can now see, unless we are blinded by prejudice or spite, the hopeful signs for the longer term health of the economy upon which job security and job creation can be built. But there is no instant solution. Who could seriously suggest that the problems of 30 years could be solved in 30 months? I shall leave it to my right hon. Friend the Secretary of State for Industry to detail the measures—

Mr. John Grant: rose—

Mr. Tebbit: This is a short debate and I really should get on.
I shall leave it to my right hon. Friend the Secretary of State for Industry to detail the measures that he is undertaking to help industry. They include aid for the traditional industries—steel, motor cars and shipbuilding—and for the new: data processing, information technology and the like. Unlike the handouts of previous times, which merely insulated inefficient and overmanned businesses from the need to change, the aid today is linked to measures to bring them into viability and independence.
For many businesses, with or without Government aid, the choice has been stark. As markets contracted in the world recession, they had to shed labour both to meet shrinking order books and to increase efficiency because the happier option of expanding production without taking on new labour was not available. Businesses that did not do so ran the risk—the risk often became the reality—of collapse with the loss of every job in the firm. So the great shake-out of labour, aimed at and talked about so often in the past, happened. It happened not at a time of our choice, but at a moment dictated by events.
Alongside these weaknesses in our economy and alongside the world recession we, in common with our predecessors, faced a third factor—demographic change. The total population of working age increased by nearly 900, 000 in the five years to 1980 and will increase by

about 1 million in the five years to 1985. In the second half of the 1980s, the demographic factors, in that sense, become more favourable. By the early 1990s, our population of working age will fall back to the level of the mid-1970s. At present, however, we need 200, 000 new jobs a year merely to keep pace with demographic change. In particular, we face a bulge in the number of 16-year-old school leavers coming on to the job market. The numbers reaching school leaving age peaked in 1980–81 at about 920, 000—about 180, 000 above the level of a decade earlier. Happily for the job market, the number is now declining again but only slowly initially. That is why, in examining what the Government can do to ease the shocks and pains of the inevitable but long overdue adjustments in our economy, it was the plight of young school leavers that caused me most concern.
As a result, the lion's share of the £4, 500 million expenditure over three years on special employment and training measures will go to young school leavers. There is in any experience, however unhappy, the prospect of gaining some advantage. In dealing with the crisis of unemployment, I have taken the opportunity to improve our standards of industrial training. It is common ground between us that in industrial training we have fallen behind our competitors abroad. Far too many of our youngsters entering the work force have lacked any training at all. Our apprenticeship system may have been admirably suited to the first half of the twentieth century, but it certainly is not suited to the last quarter.
By welding together our special measures programme to meet the problems of unemployment and our training programme to meet the competition of better trained work forces abroad, we have set out to meet that challenge. The House should not underestimate the scale and scope of these programmes. It is all very well for the SDP in its amendment to call for a two-year programme of training for young school leavers. What stopped the right hon. Members for Crosby (Mrs. Williams) and Plymouth, Devonport (Dr. Owen) from implementing even a one-year scheme when they were in office? Was it the Lib-Lab pact? Was it the then Secretary of State for Employment? Did they not possess the weight to take it through the Cabinet? Were they unable to obtain the credit from the IMF to take it through? Whatever the reason, they did not invent it until they got into Opposition and after they had left the Labour Party.
Today, there is also in being the community enterprise programme, and that has been increased to 30, 000 places.

Mr. John Grant: It should be doubled.

Mr. Tebbit: No doubt. Everyone would like double everything—double wages, double jobs, double all. That is the SDP programme.—[Interruption.] I do not believe that the hon. Gentleman seriously thinks that I am frightened of him. Some fishes are too small for serious fishermen.
The job release scheme is being extended from 1 February to men of 62. For the disabled, it is already 60. The young workers scheme is also in operation. There has been a good response from industry. This can open up jobs to youngsters willing to take realistic wages. I hope that it will not only be employers who promote this scheme to would-be workers but that youngsters of 16 will go to employers and point out that they can be paid £40 a week at a wage cost to employers of only £25.
The youth opportunities programme is a continuing success. I freeely give credit to the previous Administration for the inception of the scheme. The number of youngsters seeking places speaks for its success. At the latest count, about 240, 000 people were benefiting from the scheme. In all, more than 1 million young people have benefited. It is right that the House should congratulate the Manpower Services Commission, the employers, the voluntary services, education departments, the local authorities and all the others who have helped to operate the scheme. [An HON. MEMBER: "And the trade unions".] And the trade unions. Indeed, everyone who has been concermed. The trade unions are, of course, included within the MSC, which is a tripartite body.
The Christmas undertaking was all but achieved, and 280, 000 of this year's unemployed summer school leavers have been taken into the YOP. Only 15, 000 youngsters could not be offered places by Christmas. I hope that support will be extended and increased this year and next as the YOP fills the gap until the youth training scheme is in full operation from September 1983. Indeed, in 1982-83, I hope that 100, 000 of the YOP opportunities will be 12-month enhanced quality places approaching or even reaching the YTS standard.
Alongside these measures, we shall continue to offer support to apprentice training, although this will be increasingly orientated to late twentieth century style apprenticeships and to other adult training schemes. I have mentioned the Department of Industry's spending of £3 billion and my Department's plans to spend £1·5 billion a year on these programmes by 1983–84.
Contrary to what is implied by the economic illiteracy of Labour's "Plan for Expansion", to which the Opposition amendment refers, unlimited spending out of limited resources is a recipe for economic disaster, not recovery. There are no short cuts. Our industry and commerce must provide the goods and services that the customer wants at a price that he can afford. If not, someone else will. Jobs will be created in Germany and Japan and lost here in Britain. [AN HON. MEMBER: That has already happened."] That is the problem. Over the last 10 years and beyond we have lost against these growing economies. Like it or not—the Opposition generally dislike it—there is a growing mood of realism which, even if not too widely evident in the upper echelons of some unions, is evident among their members. Restrictive practices are being removed. Pay claims are being related to what employers can afford—and settlements certainly are.
Pay is far from being the sole cause of inflation, but excessive labour costs feeding through into prices are a major cause of job losses. Cleaning up the mess of the winter of discontent—honouring the Labour Party's commitments to the Clegg commission—left a rate of wage settlements approaching 20 per cent. in 1980. By the end of the 1980–81 pay round, it was down to about 9 per cent. [Interruption.] We honoured the Clegg commission recommendations; we said we would. It was set up as the only answer to the mess into which the previous Government had got themselves during the winter of discontent.
The CBI figures suggest that settlements are now running at about 6 per cent. to 7 per cent. That is the common sense of managements and work forces showing through. Together with an outstanding good record in strikes—the figures to be published later today show that

in 1981 the number of days lost was less than one-third of the average over the last 10 years—these real advances have shown through in terms of increased productivity, increased competitiveness, increasing export success and an increasingly firm foundation for future expansion.
Nothing in life is certain.

Mr. Clinton Davis: Will the Secretary of State give way?

Mr. Tebbit: I suspect that this is certain.

Mr. Davis: Amidst the "Tebbits" of information that the right hon. Gentleman drops from time to time. can he say whether the Government accept any responsibility at all for the 3 million unemployed?

Mr. Tebbit: I accept, and the Government accept, responsibility for some of the consequences of getting the economy back into a shape in which it can compete across the world. The House must ask whose responsibility it is when overmanning is tackled and cured. Is unemployment the responsibility of those who tackle the problem or of those who allowed it to build up? The common sense of management and work forces is now showing through.
Nothing in life is certain. Nothing can be taken for granted. All the gains could be thrown away in the mistaken belief—in the persistent heresy—that forcing demand into the system at a time when inflation is still too high, when Government borrowing and taxation are too high, can do other than bring the shortest term relief at the expense of the longest term disaster.
I began by referring to the common ground of our concern for the plight of the unemployed and our determination to beat the problem of mass unemployment, but from there the common ground disappears.
Both the amendments—the amendment that you, Mr. Speaker, have chosen from the old Labour Party. led, if that is not to overstate the case, by the right hon. Member for Ebbw Vale (Mr. Foot), and the amendment from the new Labour Party led by… led by—Somebody help me. Who is it led by? Come on, give me a hint. According to the amendment on the Order Paper today it seems to be led by the rather shy right hon. Member for Crosby. Both parties have retreated straight back to their common ground of spending resources that they know we do not have. They do not even know how much they want to spend.
Yesterday the right hon. Member for Chesterfield (Mr. Varley) was asked by Mr. Ian Ross of ITN how much reflation he wanted. The right hon. Gentleman said "Oh, I am talking in terms of billions." We guessed that, but of how many billions was he talking? Was it £1 billion, £2 billion, £3 billion, £4 billion or £5 billion? Has the right hon. Gentleman become another arithmophobic?
Memories, particularly political memories, are short. Blessed, selective amnesia can strike the House in the same spot time and again. I bet that the right hon. Member for Crosby has forgotten that in The Times of 2 February 1977 she said that we were seeing the increase of unemployment throughout the industrialised world and that it was a problem for which we still had no real answer. That is, until today. Today she has found it.
As the House considers the motion and the amendments, I invite hon. Members to recollect that the Government have been in office for 32 months and will be in office for much longer yet. I invite hon. Members to


cast their minds back to events 32 months after the Labour Government took office in February 1974. That takes us to October 1976.
I am sorry that the right hon. Member for Leeds, East is not in his seat because he would remember his conversion to monetarism on 28 September on the occasion of his U-turn on M4. Of course, he had started to believe when in his July Budget he cut £1 billion off expenditure and raised national insurance contributions by £1 billion. That was when he said that the long-awaited economic miracle was in our grasp. Fumbled again. In September he had just raised MLR to 13 per cent., sterling was tumbling out of control and he had to apply to the IMF for aid—for a loan of £2·3 billion.
By 25 October sterling was down to $1·57. The right hon. Gentleman had raised MLR to 15 per cent. on 7 October. All that was in pursuit of a sound Socialist economy. By 15 December he had introduced a Budget of £2·5 billion, cutting foreign aid, cutting housing, cutting education and social services and putting up prices. The right hon. Member for Cardiff, South-East (Mr. Callaghan) then said "Pessimism is overdone." That is true. It was. When the right hon. Gentleman and the then Chancellor were monetarists on dog leads from the IMF things went fairly well, but as soon as they broke free the troubles, culminating in the winter of discontent, were upon them.
There is no sensible alternative to our policies. There could be a return to the Socialist planning policies that brought the Labour Government to their humiliating plight after 32 months in office—policies that left us a nation in debt, industries overmanned and uncompetitive and inflation stoked up to go through the roof. Those policies were supported by members of the SDP in Government, even in the last vote of confidence, and endorsed when they stood for election as Labour candidates in the days when the right hon. Member for Crosby still said that the right hon. Member for Bristol, South-East was a moderate. What comfort can there be for the unemployed in going back to those policies? There can be none whatsoever.
The Government have combined firmness of purpose and steadfastness in pursuing the long-term objectives of more, better and secure jobs based on the ability to meet and defeat our competitors. We have taken that view with a determination to fund and operate special employment and training measures to help people damaged by the toll of unemployment. I am happy to say that, under that dismal toll of unemployment, the signs are that the economy is growing and that the returns for the efforts and hardships are coming through.

Mr. Dennis Skinner: Rubbish.

Mr. Tebbit: The hon. Member for Bolsover (Mr. Skinner) might not be able to read the figures, but the Employment Gazette publishes graphs so he can see the way that the figures are moving up.
To throw that away in a wave of self-indulgence, mistaking it for constructive help, would be madness—economic madness. It would be a disaster for both the 12·7 per cent. unemployed and the 87·3 per cent. employed alike. What is more, I remind a few of my hon. Friends, it would also be electoral madness for them, as it was for the Labour Party in 1979.
I repeat that no one can guarantee success in these affairs. Much progress has been made. We know well that any improvement in unemployment must lag behind the gains in productivity, the gains in competitiveness and the increased flow of jobs on to the register which we have seen. It would be folly to throw all that away in repeating a failed Socialist experiment, even with the Labour SDP, in the mistaken belief that the softer option is the better option.
Above all, it would be a cruel and heartless deception of those who have been hardest hit by the mutual follies of Governments—yes, Governments—industry, commerce, unions, workers, management, and all of us in the past. There can be no turning back now. Let us have the courage to take these policies through the rest of the way to success.

Mr. Eric G. Varley: I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof, 
appalled at the toll of unemployed people, which now exceeds 3 millions, and is among the highest proportionately in Western Europe, calls upon Her Majesty's Government to institute a programme of capital investment in civil engineering works, house construction and improvement and energy conservation, to make employment subsidies available for jobs for the long-term unemployed and to initiate a proper two year skill training scheme for school leavers and a re-training programme for those with obsolete skills; deplores the official Opposition's unrealistic and ill-considered policies which take no account of their impact on inflation; and urges Her Majesty's Government to include fiscal and incomes policies among the means for curbing inflationary pressures instead of relying on high interest rates and lengthening dole queues.
When I was elected to the House in 1964, I never believed that I would take part in a debate about 3 million unemployed. We expected something better from Her Majesty's Secretary of State for Employment. We have just listened to a thoroughly nasty speech. When it exuded sympathy, it was at best unconvincing and at worst positively repulsive. It was full of the lame excuses that we have come to expect from the Conservative Party. It contained some selective statistics about oil prices, but the right hon. Gentleman failed to remind the House that for the whole of the period during which the Government have been in office they have had North Sea oil, to the full value of the British economy. That has been a tremendous boost, and it was not available when oil prices quadrupled under the Labour Government.
When the Secretary of State dealt with what he called the realities of the situation, he showed himself in his true colours. He insulted not only the Opposition—we can take that from the right hon. Gentleman—but some of his right hon. and hon. Friends, and particularly his right hon. Friend the Member for Sidcup (Mr. Heath) and his Administration. No one would believe now, listening to what the right hon. Gentleman said, that that Administration included the present Prime Minister. The Prime Minister's appointment of the Secretary of State to his present position is an insult to the unemployed.

Mr. Geoffrey Dickens: Rubbish.

Mr. Varley: The Secretary of State is the wrong man in the wrong place at the wrong time. Looking at his qualities, it is impossible to imagine that he will have a distinguished career as Secretary of State for Employment,


but it is certain that he will go down in history—it is his unenviable fate, for which he will be remembered—as the Minister who presided over 3 million unemployed. Judging from what he said this afternoon, he actually blames them for it. Overmanning is a subject about which the right hon. Gentleman talks from time to time—it is necessary to reduce overmanning—but why does he not occasionally, instead of running down British industry, point out that there are some superb successes? That has always been the case.
There is no part of the country or no type of worker that is immune to the Government's destructive policies. Practically every family in the land now has some direct or indirect experience of unemployment. Its tentacles stretch from Scotland to the South-East, infecting the country in areas which never knew it, even in the worst days of the 1930s.
In previous recessions, unemployment increased in different parts of the country in a manner that maintained the ratio between the regions. The present Government's unique achievement is that they are spreading unemployment more evenly than ever before across the face of our country. As one might expect, the areas in which unemployment has always bitten deep and which have never fully shared in national prosperity have been very hard hit by the present slump, but regions that have never known serious unemployment before now shiver in the grip of it. The picture is both appalling and instructive.

Mr. Dickens: What would the Labour Party do about it?

Mr. Varley: In Northern Ireland, for every 100 people who were without jobs under the Labour Government, there are now 186. In Scotland the figure is 197. A similar picture is to be seen in the South-West and in Wales, where the figure is 209. In East Anglia there are now 224 unemployed for every 100 when Labour left office. In the North-West the figure is 225. In Yorkshire and Humberside the figure is 243.
Those figures are terrifying enough, but I come to areas which, until now, have always known prosperity. In the South-East—an area represented by the Secretary of State for Employment and the Prime Minister among others—for every 100 people unemployed when Labour left office the number now seeking work is 252. The same is true in the East Midlands. Now we come to the Government's extraordinary achievement. In the West Midlands, for every 100 unemployed when the Prime Minister walked into Downing Street, there are now 297. It has taken the right hon. Lady to bring the percentage of unemployed in the West Midlands to the same level as in Scotland. It takes a special sort of incompetence to turn the West Midlands into a depressed area.
The Prime Minister waffles on about the paramount importance of competitiveness, but it is her special achievement that the most competitive industries have suffered, along with the less competitive. All have suffered—industries with high wages, industries with low wages, industries with high prices, industries with low prices, industries which are heavily unionised and industries which are thinly unionised. The Thatcher blight has hit them all. It has hit metal manufacturing and textiles, engineering and footwear, distribution, both wholesale and retail, local government and the building industry. Nobody has escaped. Companies have fallen like ninepins.
The Department of Trade has recently confessed that last year the number of company liquidations reached an all-time record level. Small firms, damaged as never before under the present Government, are laying off workers, as are large factories. Yet the Prime Minister, in her new year message, had the nerve to say:
We must do something to help small businesses develop and grow, because that is where the new jobs come from.
At Question Time yesterday the Prime Minister filibustered and answered only two or three main questions. She force-fed the House with statistics which were irrelevant, inaccurate and misleading. She made great claims about the number of vacancies—"vacancies up", she said—but she was very careful not to give figures, and she was very careful to choose a base date that suited her. In fact, when Labour left office, there were five unemployed for every job vacancy, and heaven knows that was bad enough. Today there are not five unemployed workers chasing every vacancy, but 25. That is the triumph over which the Prime Minister was crowing yesterday.

Mr. Clinton Davis: Is my right hon. Friend aware that in the area of East London that I represent nearly 1, 300 youngsters are chasing 22 jobs? Presumably the Secretary of State would regard that as a triumph.

Mr. Varley: My hon. Friend is right.
The figures are available for individual areas. The entire country is a depressed area. The South-East and the West Midlands have been reduced to a level that previously would have attracted development area status. An even more devastating fact, which the Prime Minister concealed when addressing the House yesterday. is that production in manufacturing industry has fallen by 15·4 per cent. In looking around her for some body or someone else to blame for these intolerable unemployment figures, the Prime Minister tried to make something of the fact that the population of those who had reached working age had been rising.
It is the Government's special achievement that the number of workers in employment has been falling. Even though unemployment rose under Labour, the number of workers in employment rose as well. When the Labour Government left office the employed population stood at 25, 120, 000. In June 1981, the latest period for which figures are available to me, it had declined to 23, 418, 000. Bearing in mind the other figures that are available, I am sure that it is worse now.
The Prime Minister tries to minimise the grim significance of the figures by saying that some people are losing jobs but others are getting them all the time. She makes it sound like a conveyor belt. I have heard Conservative Members use that sort of analogy outside the House. The number of people who have been out of work for more than a year has more than doubled in 12 months. The number is now 874, 000. The long-term unemployed, in the jargon of the Department of Employment, are not travelling merrily along the conveyor belt. They are imprisoned in a lift that is soaring upwards out of control.
There are others. There are those who cannot be thrown out of a job, because they have never had a job. There are those who find, when they leave school, that the community has no use for their talents and ideals. Bright-eyed youngsters are given the impression that once their formal education is over society has no use for them. It is among young people that the toll is worst—for every 100


unemployed when the Labour Government left office the number is now a terrifying 404. All that the Secretary of State can offer those young people is that by the end of 1983 they will be eligible for his new training scheme, with its princely recompense of £15 a week. What is more, any young boy or girl who has the impertinence to turn down that unrivalled opportunity will be punished by being made to forfeit supplementary benefit.
That is not the only form of blackmail in which the Secretary of State is indulging. He has come up with a new scheme, which is being tried out in selected parts of the country. My hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) has informed me that it is being conducted in his constituency and in other areas. The unemployed are being ordered to fill in a new, long questionnaire in which they are required to answer detailed personal questions—my hon. Friend has provided me with a copy of the form—and told that if they refuse to comply they will forfeit their unemployment benefit. That is the penalty for refusing to co-operate in the Tebbit inquisition. When questioned on this today the Department of Employment was unable to point to any parliamentary authority authorising the questionnaire or the withholding of benefit. Perhaps the Secretary of State will investigate this, as it is a matter of great interest to the House.

Mr. Tebbit: I think that it is a long-established practice that if people are not available for work, which is what the form asks, they do not receive benefit.

Mr. Varley: That may be a long-standing practice, but this is certainly a new one. I assume that the questionnaire was approved by the Secretary of State before it was sent to selected offices in the Northern region, Yorkshire and Humberside and South-East London. It arises out of the Rayner report and is a new exercise involving long and detailed personal questions, some of which, of course, relate to whether the person is available for employment. People are being told by local offices that if they do not fill in the form, which is not required by the vast majority of offices, they will lose their unemployment benefit. If the Secretary of State does not know about this, perhaps he will take the matter on board and report to the House in due course.

Mr. Tim Renton (Mid-Sussex): rose—

Mr. Varley: The debate has already been truncated. If I give way to the hon. Gentleman. I shall not be able to give way again.

Mr. Renton: That is an extraordinary statement. With regard to the new training initiative, is not the right hon. Gentleman showing his normal characteristic attitude, which is that if he finds a gold bar in the street he tries to make it look like a wooden leg? Would he really recommend that parents should advise their children to take home £18 per week in supplementary benefit rather than a training allowance of £15 per week? Is it not significant that when the right hon. Gentleman was Secretary of State all that he did was to produce Green Papers about training, whereas my right hon. Friend has gone ahead and is bringing in a scheme?

Mr. Varley: The Secretary of State is taking an initiative that was launched by the Manpower Services Commission, but he is likely to spoil it by the level of

allowances offered. An allowance of £15 a week will be regarded as derisory. I wanted a proper training scheme for young people. In view of the facts that I have outlined, it is now more urgent than ever. When the youth opportunities programme was introduced by the Labour Government, 70 per cent. of those going through the scheme found a job. The proportion is now less than 30 per cent., and goodness knows what it will be under the new scheme. The Opposition are in favour of training, but it must be proper training, with a proper rate of payment. I hope that the Secretary of State will do something about the questionnaire to which I referred.
The unemployment benefit, which the Secretary of State may find it necessary to cut in selected areas as a result of the Raynor report, has been shown to be less in real value than it was in 1971. Under the Conservatives, the real value of unemployment benefit has fallen to its lowest level since that time. Soon, as in the 1930s, it will be possible to distinguish the children of the long-term unemployed by their physical appearance from those whose more fortunate fathers were able to hang on to their jobs. In the face of the damage that they have inflicted on the country, instead of taking action to improve the situation the Government are trying to talk their way out of it.
The Secretary of State referred to the international statistics. Has he seen the reports in today's newspapers about the Common Market? On the Brian Walden show he said that before the end of the Government's term of office unemployment would begin to fall and people would flock back to support the Conservative Party. That is not the Common Market's view, which is that:
when the next General Election is due—3, 600, 000 people will be out of work in Britain".
But, according to the same statisticians, it will be falling in West Germany and in France. [Interruption.] The right hon. Gentleman had better join the club if he wishes to become an anti-Marketeer.
No weekend is complete these days without another effusion of complacency from the Chief Secretary to the Treasury, the Pangloss of the Conservative Administration, but it is the Prime Minister who doles out the most liberal doses of syrup. Not only does she not fool the people, however—she does not even fool her own colleagues. The right hon. Member for Lowestoft (Mr. Prior), who was sacked as Secretary of State for Employment and sent away to Northern Ireland for daring to tell the truth, is perhaps a good example. I wonder who he had in mind when he said at the weekend:
Nor is it any use simply proclaiming that the only solution to inflation is to set oneself flint-faced against any request for extra Government spending.
Whoever the Secretary of State for Northern Ireland had in mind, tomorrow the Prime Minister will be holding a crisis Cabinet.

The Prime Minister: No.

Mr. Varley: The right hon. Lady says that it is not a crisis Cabinet. I can only say that it should be, because we have a crisis of unemployment. The country will be interested to know that instead of taking unemployment seriously the Prime Minister has decided to laugh about it. I thought that she cared. There will be no point in that Cabinet meeting unless the top item on the agenda is how to tackle unemployment.
The Prime Minister will say that our proposals to deal with unemployment will cost a great deal of money, but


unemployment is costing a great deal of money. Unemployment is costing about £13 billion per year. The nation is spending more and more on financing unemployment. It is spending more on unemployment than on the National Health Service. It is spending more on unemployment than on education. It is spending more on unemployment than on the rate support grant, and the precious revenues from North Sea oil are being squandered to finance unemployment.
That £13 billion could be used as a fund to finance long-term, secure jobs. Public money can be used to finance worthwhile public investments. Only this week British Aerospace unveiled its new Jetstream aeroplane at the Scottish Aviation factory at Prestwick. Orders are already coming in. Without public ownership and public investment, that factory would have been closed long ago.
I do not know whether any of my hon. Friends heard the Secretary of State on the radio this morning lavishly extolling the merits of Smith's Dock Ltd., the shipyard on Teesside, and the showpiece vessel that it has just launched. Smith's Dock is part of the nationalised British Shipbuilders. It would not exist today had British Shipbuilders not been nationalised by the Labour Government. It would have disappeared ages ago.
It is particularly rich that the Secretary of State, of all people, should lavish praise on that company, because as a Back Bencher in the last Parliament he spent 58 sittings in the Standing Committee on the Aircraft and Shipbuilding Industries Bill doing his worst to try to kill that measure. If the right hon. Gentleman had his way today, there would be no Smith's Dock, no showpiece vessel, no aerospace factory in Scotland and no Jetstream. What was done there can, should and must be done elsewhere.
A fraction of the money being frittered away unproductively on unemployment could be used to provide about 100, 000 jobs for building workers to build homes for our homeless, because there will be a colossal housing problem in a few years' time. The Prime Minister, the Secretary of State and the Cabinet know that.
The disaster threatening some of our older cities, with their crumbling sewage systems, could be put right by creating jobs in the construction and material industries. Instead of picking on the nationalised industries and using them as their scapegoat, the Government should use their potential to get the British economy moving again. Local authorities, which are taking such a hammering from the Government, could be used to provide massive support for customers in the private sector. I do not know about Conservative Members but private firms in my constituency tell me they are kept going by orders from the public sector.
The right hon. Lady says that she cares about unemployment—

Mr. Richard Needham: rose—

Mr. Varley: I should like to give way, but I must proceed, because of the shortage of time.
The right hon. Lady says that she cares about unemployment. If so, she must cast aside her dogma and obstinacy. Instead of telling us that she cares, she must take action to prove that she cares, but I fear that that is too much to ask of her and her colleagues.
The Secretary of State said that there was no alternative. I do not know how that went down with the

right hon. Member for Chesham and Amersharn (Sir I. Gilmour), the former Lord Privy Seal. This is a no plan, no hope Government, who in their first Queen's Speech in May 1979 promised to
create a climate in which commerce and industry can flourish… and increased employment in all parts of the United Kingdom"—[Official Report, 15 May 1979; Vol. 967, c. 48.]
What a shoddy deception those words have turned out to be. I wonder what St. Francis would have said about 3 million unemployed. It is richly ironic that in the month when the number of registered unemployed has topped 3 million, the Tory Party has provided a new contract for Saatchi and Saatchi. At least this time they will not have to recruit the Hendon Young Conservatives to pose as a phoney dole queue for them.
The Government have failed. They have failed on inflation, which is higher now than when they came to office. They have failed on production, which is lower now than when they came into office. They have failed on humanity. They are ready to see unemployment soar above even this week's criminal figure. It is time that they went. It is time that the Prime Minister went. Sooner or later the country will get rid of her.

Sir Russell Fairgrieve: I am somewhat surprised to find myself so high in the batting order. I was disappointed by the speech of the right hon. Member for Chesterfield (Mr. Varley), because he said nothing constructive about what the Opposition might do.
The right hon. Gentleman's speech also disappointed me for historical reasons. He will recall that during the last Parliament I had the pleasure of serving as the Tory Whip on the Petroleum and Submarine Pipe-lines Bill, which he steered through the House until he was replaced by his right hon. Friend the Member for Bristol, South-East (Mr. Benn)—someone who understood absolutely nothing about industry.
No political party has a monopoly of sympathy for those who are unemployed or a monopoly of the causes for it. Having said that, nothing can remove the trauma of being unemployed or what it does to a person's dignity or morale, especially when the bread-winner gets up in the morning, sees the children going to school, his wife begin the housework and he has no proper job to go to. The only redeeming feature is that today unemployment is not accompanied by the deprivation and hardship that went with it in the 1930s, when there were families short of clothing and short of food.
I am of an age to remember well the dole queue stretching right round the market place of the small Scottish textile town of Galashiels, where I grew up. Fortunately, I had parents who made sure that my sister and I as children understood what that meant, because we were made to visit and help where there were whole families living in single rooms. As a result, we saw and understood what real hardship was.
I never really saw unemployment again until after the Korean war, when our firm went on short time for a few weeks. That experience taught me another lesson—that the head of the firm must be its chief salesman. Other matters can be delegated to competent managers, but the head of the show must take full responsibility for marketing the firm's products and keeping people employed.
The trouble today is that it has taken Britain 20 years to arrive at our present situation, and any idea that it can be cured in a couple of years should be forgotten. We have made so many mistakes during that period, which started about the time that we missed going into Europe with our now main competitors. About 20 years ago we had about the highest standard of living in Western Europe and today we have about the lowest. That can be measured by many statistics, such as pay, pensions, holidays and all the other things that go to making up the standard of living in any developed country.
We have only to look around us to understand the causes of unemployment. British unemployment is seen in German cars, Japanese television sets and Italian refrigerators, or by going to Europe and seeing how many British vehicles are among the German, French and Italian ones, or what proportion of British-made consumer durables are being sold in Europe. If we were only buying and only selling a higher proportion of British-made goods, unemployment would drop considerably.
Also, one has only to enter our restaurants and hotels and see the number of people of non-British origin working there to witness another aspect of British unemployment, because either we cannot or will not do these perfectly respectable jobs. If we add overmanning and outdated labour practices that have been allowed to continue, and even grow, over so many years, it is not surprising that we have reached our present state of affairs.
Of coure, one has to accept two other facts: we are in the middle of probably the most severe world recession that we have ever experienced, and the last few years have seen the horrific increase in energy prices.
Having said all that, in a debate of this nature one must try to be constructive and see what might be done to start bringing down unemployment over the years ahead. I want to consider some of the possibilities. Already the private sector of British industry, which faces tough competition, has taken major steps to make itself more efficient. This can be seen right across the board, but, regrettably, this does not apply to the public sector, particularly the nationalised monopolies, where we have yet to find a discipline that can take the place of competition. Ideas about job sharing are sound, but have to be left to the individual. We all know of families, with children away from the home, where the husband and wife can have three or four jobs between the two of them. It could be that this is unnecessary when other families have no jobs at all. I think that we can fairly look to a reduction in overtime giving jobs to others, and early retirement for those who would like to take it.
There is only one area where I cannot agree entirelyginwith the Government's arguments, and that is on bringing down the age of male retirement. In this day and age, with women's lib and all that type of talk, there is no real justification or point in both sexes not having the same retirement age. However, we are told of the phenomenal sums that it would cost to bring the male retirement age down to 60. I cannot go along with that argument fully, as it must surely mean the interchange of some unemployment benefits for pension payments. But even if this full course is difficult, surely a start can be made now on the gradual reduction from 65 to 60.
Again, we must look at our industry. There is no point any longer in making steel that nobody wants or ships that

no one will sail. However, there are areas of expansion in the service industries. There is tremendous scope in tourism and the hotel trade, and those industries could expand. We must consider retraining people, because we know that there are many unfilled vacancies in the new industries of electronics and electrical engineering. We have out-of-date apprenticeship schemes, which take too long to train at too high a price compared to our competitors.
Surely the evidence of the past 20 years is there for all political parties and Governments to see. Every time that we have tried to throw only money at our problems, more inflation has arrived and we have ended up with a higher plateau of unemployment. We cannot go back to that proven failed palliative. We must beat inflation right out of the economy so that there is a sound financial and industrial base upon which competitive industry can grow. As we become competitive, so there will be a greater demand for our products and more people will be required to produce them and the scourge of unemployment can start to be taken out of our industrial and national life.

Mrs. Shirley Williams: First, I should like to associate my party with the regrets that were expressed about the accident at Cardowan colliery. We, too, very much hope that the men who were injured will make a rapid recovery.
For the moment, I shall not follow the speech of the hon. Member for Aberdeenshire, West (Sir R. Fairgrieve). This afternoon we have seen the Secretary of State for Employment rise to his usual high level of party cracks, cheap insults and not a single constructive idea in the 33 minutes during which he spoke. That is what we have come to associate with him. It is sad for Parliament that that is the best that we can do at a time when 3 million men and women are unemployed.
Yesterday, the Prime Minister was rather different. She put up a brilliant piece of stonewalling. However, what emerged from that stonewalling, which might have qualified her for the Test match in India, was a clear indication that unemployment had risen, that it would continue to rise, and that Her Majesty's Government had not the faintest idea how to bring it down. In saying that, she was doing everything that she could to avoid answering some of the difficult questions, although the Prime Minister knew very well that sooner or later those difficult questions would be asked.
At a time when Britain as a whole has 12·7 per cent. unemployment, there are areas of the country where unemployment is 18 per cent., 19 per cent., 20 per cent. and even 25 per cent. In the area that I have the honour to represent, Merseyside, the figure is now 18·2 per cent., and that has been the kind of figure we have had for many months. The proportion of long-term unemployment is steadily rising, and people who have been unemployed for more than a year now constitute almost one-third of the unemployed.
However, that is only the beginning. Regional differentiations are not as great as the generation differentiations. Within the generations we now have youth unemployment at 25 and 30 per cent., and in the inner cities in some cases it is approaching 50 per cent. and more. Heaven help the person who is young and unskilled,


and heaven help the person who is young and unskilled and black, because his chances of getting a respectable job are now less than evens.
The Government know very well that the unemployment figures for 1983 will be higher than the figures for 1982. Every respectable independent forecast, and that of the Treasury itself, demonstrates that. Most of the independent forecasts go on to say that unemployment in 1984 will be worse than in 1983. To give the pathetic news that vacancies are increasing when they are only half what they were in 1979 or 1978 and that overtime is increasing hardly seems to me to be much of a credit to the Government. These things are only signs, but the Government are looking at a situation that is getting steadily worse. I shall say something constructive, and I hope that Parliament will think constructively about the tragedy that now faces many of our people.
The Secretary of State for Employment said—and it was a fair point—that there is no simple solution. There are, however, two simple solutions. The first, which has been tried during the past two and a half years and found profoundly wanting, is monetarism. It has been applied as though one could simply take an economic doctrine and apply it to a complex, highly organised society of imperfect competition, assuming that it would operate as it operates in the economics textbooks. It does not operate that way at all. What happens is that unemployment rises long before prices fall, and long before wages fall. What happens is that investment collapses before inflation is got under control.
However, there is an equally simple solution, and that is to throw money at the problem, to talk about merely increasing public expenditure, to talk about import controls, and increasing and inflating the economy until everyone is back in employment. That does not work either, for the straightforward reason that inflationary pressures rapidly get out of control if one pursues that course.
May I say to the official Opposition that they must face two questions before their policies can be taken seriously. I say this to the right hon. Member for Chesterfield (Mr. Varley), who made a good and constructive speech. The first question is: when will they face the question of competition in the economy? The second question is: when will they face the necessity for an incomes policy? That is something that they must face, regardless of the views of some trade union leaders who support them.
What of the Government? They will introduce a Budget next month. We are told that it will be able to bring about a reflation of between £1½ billion and £2 billion. Good, but what are the Government likely to do with that reflation? First and foremost, they must restore the value of unemployment and other social benefits. Anything less would be to cheat the people of this country on the pledges that the Government themselves made. Secondly, the Government must restore the indexing of personal allowances, not least of the age allowance, which has led to the most profound disillusionment and confusion among old-age pensioners, who now pay tax earlier than they paid it last year, because the age allowance was never increased in line with inflation in 1981–82.
Thirdly, I hope that the Government will decide not to spend whatever else they can afford on reducing the standard- rate of income tax, because there is no way more expensive in PSBR terms of creating new jobs than that. Hon. Members know well that it leads to more imports.
What do we suggest instead? We have constructive proposals. First and foremost, we suggest that the time has come to reset the context in which Britain's competitiveness must be restored by public investment within an overall programme amounting to between £5 billion and £6 billion gross a year, concentrated on the labour intensive programmes of house improvement and modernisation, energy conservation and civil engineering works on the basic infrastructure. Sound and reali5tic economic groups, including the Cambridge Econometrics Group, have estimated that the PSBR cost of creating jobs in those areas is between £2, 500 and £3, 500, which is less than the cost of keeping a roan or woman unemployed.
The Government should devote themselves to a modest programme of public investment in areas that are labour and skill intensive, and not capital intensive—for that is not the sensible way in which to do it. But as well as setting the context in which employment might recover, the Government must also set the direction.
The Secretary of State for Employment accused me—I shall not waste much time on it—of doing nothing about training and education of a technological nature when I was Secretary of State for Education. But as a result of the initiatives that I took then—co-operative industrial awards, teaching companies and engineering scholarships—the increase in young men and women trying to enter engineering and technology course:3 in 1979–80 and 1980–81 was the greatest since the Second World War. Today, those young people are facing unemployment as a result of their willingness to move to subjects that would be of long-term help to Britain. I fear for them, because the promises to them will once again have been broken.
What does the Secretary of State propose to do? He is introducing a youth training scheme that is essentially cosmetic. He has seen apprenticeships decline by 25 per cent. while the Government have been in office, apprenticeships that were not replaced by any effective skill training scheme. The youth training scheme is not that. It is a one-year, cosmetic attempt to take young men and women off the unemployment rolls and to give them nothing resembling a real skill or qualification. One does not receive that in one year of a cobbled together, cheap scheme.

Mr. Tebbit: Will the right hon. Lady give way?

Mrs. Williams: I shall finish what I wish to say first, because the Secretary of State may also wish to reply to that.
The scheme does not begin until September 1983. There seems to be no evidence that the Government have attempted to recruit training officers, to establish where redundant educational premises can be made available for the purpose or to take up the many vacant places in training schools that would be available for proper skill training schemes if the Government put their back into the job in a way which there is no evidence they have tried to do.

Mr. Tebbit: The right hon. Lady should think carefully about what she is saying. My criticism of her is that, in her amendment, she calls for a two-year training scheme for all school leavers, but she could not in her time organise even a one-year scheme. I have secured the financial resources for that. The right hon. Lady has not seen any details, but she is convinced that it will be a failure. By saying that, she is doing all that she can to


make it a failure and to deprive youngsters of that training. She seems unaware of the fact that the scheme will spend £1 billion a year on about 300, 000 youngsters, which is sufficient to give them a good, sound basis of training and to repair some of the omissions of their education, which occurred despite the system set up by the right hon. Lady. She is doing a great disservice to them.
She also asked me to identify the schools and workshops. She seems to have forgotten that the Manpower Services Commission is charged with that responsibility and has the resources with which to do it.

Mrs. Williams: The Secretary of State's intervention was useful and I am glad that he chose to make it. I do not deny that the youth training scheme may have its uses, although I believe that it will not work because it is an exceptionally cheap scheme. The Secretary of State has not addressed his mind to the creation of a genuine skill training scheme, which is modulated, and which leads us to fill some of the terrible gaps in the numbers of technicians and technologists.
The Secretary of State has something else to answer for. If he has looked at the files—I suspect that he has—he knows that in 1979 the Labour Government left behind them a scheme agreed with the CBI and the TUC, which was meant to start in 1980, for a two-year training programme. The Government of whom he is a member chose to pigeon-hole that scheme and are introducing nothing until 1983. I refute what he said, because he made no attempt to carry on with that scheme. The money was available.
Britain suffers from a serious shortage of technicians, technologists and skilled craftsmen and women, which is becoming more serious all the time. The Secretary of State should ask his industrial friends about that. The evidence is that if there is a recovery—heaven knows when that will come—it will run more rapidly into the bottleneck of skill shortage than any previous recovery.
I ask the Secretary of State to address his mind to changing Britain round from becoming increasingly an up-market Third world economy into a country with the skills and qualifications to enable it to move into the technologically advanced societies to which it should belong. He should speak to his right hon. Friend the Secretary of State for Education who, the more he ponders, the more likely he is to make the wrong decision. He is carving up the higher education system not by trying to change it, which many of us would welcome, but by trying to destroy it. In a country with the lowest proportion of highly qualified manpower of all the Western European advanced countries, he is trying to chop back on what was already a disgracefully low proportion of young people able to have higher skills.
I do not believe that we shall make any constructive proposals about reducing the 3 million unemployed, which shames Britain today, unless we face up to the need for a programme of public investment in a context in which private industry can again flourish. Secondly, we must consider our long-term direction, which means the upgrading of manpower in a way that the Government have failed to tackle.
Thirdly, I say to all the parties in this House that the evidence given by Professor Barker of Cambridge and many others is that the single most effective way in which

to create an answer to long-term unemployment is to reach a basis for a sensible and lasting incomes policy. I do not pretend that any of us have succeeded in doing that so far. If we are serious, and not just scoring off one another, in an attempt to help the unemployed, we must address ourselves to that problem. We must do so not by considering the doctrine that says that it is wrong because it is not part of monetarism, nor should we fear a reaction from a small number of trade unions. We owe it to those who are unemployed in our society to face up to the problem seriously and honestly and to try to save what may well become a doomed generation.

6 pm

Mr. John Townend: I looked forward to the remarks made by the right hon. Member for Crosby (Mrs. Williams) because I thought that we might get some original ideas on how the Social Democratic Party would deal with the terrible unemployment problem. I am afraid that I was disappointed. I noted her suggestion that there should be a massive increase in capital expenditure on the nationalised industries. However, she gave us no idea how to control those industries, which we have lamentably failed to control in the past. The return on capital in them has been deplorable, as everyone agrees.

Mr. Bob Cryer: Give us some figures.

Mr. Townend: The right hon. Lady said that we should increase the benefits. Where will the money come from? She said that she would reduce taxation by upgrading the allowances. We have heard that before; spend more, do not tax more and reduce taxation. Where would we get the money from? Either we borrow more and, therefore, interest rates rise, thus increasing the burdens on industry, or we print more money, which leads to inflation. That policy will end in the same way as it did before—an application to the IMF and massive inflation.

Mr. Cyril Smith: I shall ask the hon. Gentleman two simple questions. First, what nationalised industry runs housing and energy conservation? The right hon. Member for Crosby (Mrs. Williams) asked about that. Secondly, is not the hon. Gentleman aware that it can be cheaper, in national expenditure terms, to pay people to work than to pay them not to work?

Mr. Townend: The right hon. Member for Crosby referred to massive expenditure in the nationalised industries. I accept her point about energy conservation. The other point that the hon. Member for Rochdale (Mr. Smith) made, is the same as the one that used to be made by the Leader of the Opposition when I was a county council leader. His solution for unemployment on Humberside was to put more and more people on the local authority payroll and to increase the rates. If it was as simple as that unemployment could be solved overnight, but we all know that the creation of jobs costs far more money than unemployment. No one would deny that the tragic level of unemployment is a major problem—nowhere more so than in my constituency.
The level of unemployment in Bridlington is 18·5 per cent. and there is male unemployment of over 23 per cent. However, it was unfair of the right hon. Member for Chesterfield (Mr. Varley) to blame that on the Government because, with respect, no fair-minded man could do that. We must consider the factors that have caused the long-term problem.
I agree with the Secretary of State that the principal reasons for the problem is that for several decades we have seen a decline in British industry's competitive position compared with that of its overseas competitors. That is principally due to a refusal to accept new technology, to overmanning, restrictive practices and low productivity. Many of the problems have been caused by excessive union power, but there is also a significant responsibility on management which, in many areas, has been weak and poor.
When industrial survival depends on reducing overmanning, it is inevitable that unemployment should rise. Demanning occurred principally in the private sector, but in two nationalised industries—British Steel and British Leyland—much progress has been made.
It has recently been publicised that in the last financial year British Leyland expected to produce the same number of cars using 30, 000 fewer people. If its workers had not lost their jobs, the rest of the firm's jobs would have been at risk, because the company would have collapsed. Much needs to be done to improve the competitive position of other nationalised industries. Over the past couple of weeks, there has been much publicity about British Rail. There is great scope for British Rail, just as there is for local authorities and water authorities.
There was a very high level of real unemployment for a considerable time, but it was disguised by overmanning; two men doing one man's job. The second cause of the problem has been the world recession.
That is being acknowledged more and more by the general public. A fortnight ago, I called on a man in Bridlington who had just been made redundant. In those circumstances, I expected to receive much criticism about the Government's policies. On the contrary, I was heartened that he took such a realistic view. He said "Mr. Townend, this is not just a British problem. The firm where I worked was owned by an American company. We made the machines and the Americans sold them throughout the world. There are no orders at the present time and if American salesmen cannot sell them, this is a world problem."
There is a third cause for the problem. I shall not be popular for raising it, because it is often swept under the carpet by both Front Benches. If the House had listened to the advice of the late Sir Cyril Osborne and legislated to restrict Commonwealth immigration much earlier, we would not have brought in so many people to do jobs on the railways and buses which should have been disappearing even then.
Opposition Members must accept a considerable share of the responsibility because, if the Labour Party had supported strict immigration control when it was first mooted, our unemployment problems would have been greatly reduced.
Assisted area status policies have been followed by this and the last Government and they have adversely affected Bridlington. I have always doubted the cost effectiveness of the whole programme, particularly when one considers the cost per job created in places such as Invergordon.
I have been perturbed for some time about the effect of assisted areas on adjacent areas, which receive less help or none at all. There is always the danger of a creeping malaise setting in. For example, if one area is helped, it attracts jobs and that makes it difficult for the adjoining area. That happened in Bridlington, an intermediate area bordered by the Hull development area. That made it

practically impossible to attract any new jobs to the town and discouraged the expansion of existing businesses and creation of new businesses. When a business man sets up a new firm, why should he not go 10 miles down the road and get greater help and larger grants? The policy has resulted in a most unfortunate situation. Bridlington now
More significantly, out of the 102 travel-to-work areas in Britain, in special development or development areas, no fewer than 67 have lower unemployment than Bridlington and only 33 have higher unemployment. The situation will continue to worsen until the Government rectify that anomaly.
I was disappointed when the Minister replied to a parliamentary question that I tabled this week. He said that the Government were not prepared to uprate Bridlington to development area status. That answer is not acceptable and I shall not let the matter rest until we get justice for the area.
On the national scene, an aspect of the figures has been ignored by Opposition Members. They overlooked the fact that the unemployment figures are significantly overstated because of the growth of the black economy in recent years, particularly in the more prosperous parts of Britain.
Although there are some encouraging signs, there will be fairly high unemployment for some time. I support my right hon. Friend and am heartened by the high level of exports and the improved competitiveness of much of British industry. Although business is improving and orders will increase over the next year, that will not halve an immediate effect on unemployment, because most firms can increase production without taking on substantial additional labour.
With the development of the microchip and the increasing introduction of the robot, manufacturing industry is unlikely, in the foreseeable future, to create the number of jobs required. In the middle of a technological revolution that will affect the pattern of employment for the next 50 years, it is strange that the Opposition should completely ignore that point. It is only after wealth has been created by efficient manufacturing industry, using the microchip and the robot, and after that wealth has been spent through public expenditure, taxes and private expenditure that new jobs will be created in the service sector.
Given the natural time-lag between the recovery of manufacturing industry and the creation of service jobs, I congratulate my right hon. Friend the Secretary of State on his new training initiative. It will cushion the problem of youth unemployment in the two or three years before demographic changes result in a reduced number of school leavers.
he Government could take some useful initiatives to create jobs in the service sector. They could remove some of the fiscal disadvantages that discriminate against the service sector. For example, useful incentives have been given to build small nursery units, but tax incentives are given only if they are used for a conforming use, which is a manufacturing industry. In future, it will be as important to create service jobs as manufacturing jobs.
One of the tourist industry's problems is that, unlike many of our EEC partners, such as France and Italy, Britain is prejudiced against the service industries. Many people think that it is servile to have a job in the service industries. It is incredible that more than 600, 000 people are registered as unemployed in the South-East, when there are nearly 200, 000 foreigners working in the area.


A significant proportion of them work in the catering, hotel and restaurant industry, because many British people refuse to take such jobs. If only youngsters in Brixton would take the Tube to the West End, many of them could get jobs—if they were prepared to do so—as kitchen porters. It is important that the Government should educate people so that they are prepared to accept the jobs available.
To an extent, I support the suggestions made by the right hon. Member for Crosby. In the past 20 years there has been a significant increase in the amount of maintenance, painting and decorating done at home on a do-it-yourself basis. Often, people do the work not because they like it, but because of financial necessity. The Government might well consider giving tax allowances to those who spend money on maintaining their houses. The cost would not be as high as might be imagined. In order to be eligible for the allowance, people would have to keep invoices and that would be a major blow to the black economy and would result in many small contractors being drawn into legitimate business, registering for VAT and filing returns with the Inland Revenue.
My next suggestion will not be popular with the Opposition, but may offer significant job opportunities. I refer to personal and ancillary services, such as gardening. Many old people with substantial and inflation-proof pensions need domestic help. Some form of tax allowance might offer substantial opportunities and, once again, we might be able to hit at the black economy.
It is important to do everything possible to create real, not make-believe, jobs. I strongly support the new young worker scheme, introduced by the Government, to subsidise employers who take on young people in the first year. In Bridlington, we are not just waiting for Government help, but have recently formed an employment liaison commitee to co-ordinate the activities of all the agencies and bodies interested in creating jobs. One of its purposes is to draw the attention of employers and small businessmen to all the aids given to those taking on young people. At the first meeting, I strongly urged employers to take on young people and to take advantage of the young workers scheme. The chamber of trade and the hotel and restaurant association made a significant point. They said that they could not take advantage of that worthwhile scheme, despite their wish to do so, because the minimum wages council rate is more than £40 per week. It is nonsense that the Government should bring forward proposals to encourage employers to take on young people at under £40 per week and should give a subsidy of £15, when another set of Government regulations say that that is against the law.
The right hon. Member for Crosby mentioned apprentices. An increase in the number of apprentices is far more important than anything else. In my constituency small employers in particular find that apprentices in their first year are quite uneconomic. The staffing rates are very high compared with those found in our industrial competitors, such as Germany and France. I hope that the Government will open discussions with the CBI and the trade unions to discover whether it is possible to reduce the starting rate to below £40 for the first year of an apprenticeship, so that people can take advantage of the scheme.
I strongly support the Government's policy. The problem is not of their creation. The solution is not easy. Changes will affect us into the next century. Anyone who thinks that the problem can be solved by spending a lot of money in six months is doing the unemployed and the country a disservice. After some short-term benefit, there would be even higher unemployment.

Mr. Jim Craigen: When I listened to the hon. Member for Bridlington (Mr. Townend), my spirits were uplifted. Until he spoke, I thought that there was little prospect that the Government would change their policy. I never thought that I would hear the hon. Gentleman argue the case for development status, tax incentives and all these other items that will add to the public sector borrowing requirement.

Mr. Campbell-Savours: The hon. Gentleman was a hard-liner when he was elected.

Mr. Craigen: That is the point. He was very much a cut, cut, cut man in all our previous dealings with him.

Mr. John Townend: I have made my position clear on assisted area status. I am doubtful about the cost-effectiveness of the scheme. I should like the whole lot to be abolished so that we can compete on an equal basis.

Mr. Cryer: The hon. Gentleman is wriggling.

Mr. Townend: While we have assisted area status, we want justice.

Mr. Craigen: The hon. Member for Bridlington wants equality plus.
I am puzzled why the Government should choose to debate employment. At this mid-term stage, the right hon. Gentleman's policy on employment and the economy as a whole offers little hope. The right hon. Gentleman spoke about overmanning in British industry, and at that point I felt that the Department of Employment was overmanned by one Secretary of State.
There is no doubt that the working population is growing despite a reduction in the number of those in employment. Obviously an international recession will affect Britain's economic fortunes, but 30 per cent. of unemployment within the EEC is attributable to Britain. That shows that there are domestic economic problems for which the Secretary of State and his Cabinet colleagues are responsible.
As I listened to the Secretary of State, an anecdote about President Calvin Coolidge came to mind. In the 1920s, when it was not the done thing for Governments to be involved in economic policy, a newsman asked the President what he thought about the state of the United States economy. The answer was "Why ask me?" We received a similar response from the Government today. Apparently they do not feel that they are responsible for the state of the economy. The Minister gave us precious little hope about where we are going over the next 3, 5 or 10 years.
One fact has emerged. We shall not see a resuscitation of our manufacturing base. Industry will contract. The higher productivity that we want will inevitably mean that, although there may be new opportunities, there will not be the same number of opportunities in our existing and established industries. Therefore, we look to the service sector, to which the hon. Member for Aberdeenshire,


West (Sir R. Fairgrieve) referred, but I could have intervened during his speech to point out that the number of people employed in the service sector is falling. The fall in the buoyancy of the economy will inevitably affect many of the small businesses which we want to see developing.
When the Chancellor of the Exchequer presents his Budget in March, I hope that he will have weighed up the effects of his fiscal measures on employment opportunities. All of us are receiving representations from vested interests about the effects of possible changes in VAT or other fiscal measures on employment opportunities. I hope that the Chancellor will produce a manpower or employment Budget at the same time as his normal fiscal Budget.
The hon. Member for Bridlington expressed anxiety about intermediate and development area status. I am reaching the conclusion that regional policy is a dead duck. I see little sign of a renewal in the possibilities of regional policy. Many of us face higher unemployment in our constituencies—even higher than the figures given by the hon. Gentleman. It is incumbent upon the Government to think ahead and contemplate the measures needed to shape our economy.
Leaving aside the inner London boroughs, which have special problems, I would be pessimistic about the future employment fortunes of the Home Counties. Central London depends to a considerable extent on office employment. Two-thirds of the people who work there are employed in the great glass houses. Office technology is developing. Indeed, the Government are encouraging it. They have no alternative. However, the fact remains that in the long term such developments will have a profound effect on employment opportunities in the South-East. When unemployment hits, it will hit hard. Government Back Benchers may for once be less complacent about its impact. Many of us have experienced high unemployment in our constituencies, year in and year out.
I originally felt that a Channel tunnel might damage prospects north of the Wash, particularly in Scotland, and was sceptical about the project, but I now believe that the United Kingdom needs a significant and imaginative project in the 1980s. The Government threw away an opportunity to help the economy of Scotland, indeed of the whole of the United Kingdom, in deciding not to back the gas-gathering pipeline.
The Government should weigh seriously the psychological impact of a Channel "brunnel" or tunnel. Scotland, although it may be far removed from it geographically, has the steel, shipbuilding and construction and power engineering capacity. We may seem like mercenaries providing jobs on a project 400 or 500 miles away, but it may have a longer term beneficial effect on central Scotland's economy, as well as giving the United Kingdom the necessary significant project for the 1980s.
As I say, regional policy is dead, but a disturbing aspect of today's speeches has been that a dog-eat-dog feeling is developing between different areas.
My right hon. Friend the Member for Chesterfield (Mr. Varley) mentioned the change to voluntary registration for the unemployed and the pilot schemes to be conducted in various benefit offices. The most disappointing aspect of the change is that the Government appear to have shifted from the jobcentres' role to place people in employment. One difficulty is that they are running out of jobs.
The benefit offices will have problems with the scheme, which will be designed not to hand out more public money but to winkle out people and stop them from receiving benefits.

Mr. Tebbit: I find much of what the hon. Gentleman has said interesting and relevant to the debate, but let me tell him a little more about the pilot scheme and the new form. The first question asks whether the applicant is available for any job that he could do. If the answer is "Yes", there is no need for him to fill in the rest of the form. If the answer is "No", further questions require to be answered to see whether he is available for work or why he may not be.

Mr. Craigen: I have seen the questionnaire. There may be a check to see whether people have answered the form correctly.
I believe that there will be problems. There will be unpleasantness, and the staff will have the difficulties. People will rightly be indignant about the way that the staff are obliged to treat them because of the questionnaire.
I wanted to see something done about new training initiatives. The right hon. Member for Crosby (Mrs. Williams) has now left the Chamber—

Mr. David Lambie: The whole Social Democratic Party has gone.

Mr. Craigen: That is right.
I did not want to interrupt the right hon. Lady when she was speaking, but I believe that, apart from giving the initial training to young peope when they leave school, the important thing is to train them for the skills that are required. We are creating an escalator effect so that young people have not only qualifications, experience and skills, but the possibility to move into permanent employment, with recognition of the time that they spent in the new training initiative.
There is a danger that we could be training young people in yesterday's skills for tomorrow's requirements which do not call for those skills. That is why I believe that one cannot divorce the overall employment opportunities from what the Government—whether it is a past or future Labour Government or the present Conservative Government—seek to do. Young people are rightly looking for permanent employment. They are not looking for cul-de-sac opportunities which do not lead anywhere, but which create the illusion and promise that they will.
The remarkable thing about the young workers scheme, the inadequate YOP allowance and the disgraceful trainee allowance that has been promised under this scheme is that a Conservative Government, who are pledged through their philosophy to free and unfettered collective bargaining, are for the first time intruding noticeably in the wage settlements that young people will have. The hon. Member for Bridlington used to talk about the wages council rates, which he thought were too high. He is now complaining that they are too low.

Mr. John Townend: I should make it clear that I objected to the fact that the starting rates for the wages council were higher than £40 a week, which prevented employers from taking advantage of the young workers scheme.

Mr. Craigen: That brings me to the point that I was about to make, that the Government will have to concentrate on reducing the price for employers to employ


people. Employers are not concerned only with wages and salaries. They must pay national insurance contributions and other taxes. They must also train young people. The Government will have to reduce those other factors much more in their considerations, so that employers' payments are at reduced prices.
I found some interesting statistics recently about the number of people who are emigrating. Hon. Members have talked about the number of people coming into this country, but more people are deciding that there are opportunities abroad. Apparently, despite the international recession, those people are finding those opportunities. Nearly 250, 000 left this country in 1980.
Today's outline of the Government's economic strategy was threadbare. The remark of the former Lord Privy Seal about the country heading for the rocks is true. The trouble is that the Prime Minister is sitting on a rock like a mermaid, half in and half out of the water. She is not clear about what she should do. If she reflates the economy, she will be in trouble. The alternative is to continue to submerge the economy.
Therefore, I have not been particularly uplifted by today's debate, apart from the twinkle from the hon. Member for Bridlington, who hinted that in some Conservative quarters there was a prospect that at long last the significance of high unemployment was being recognised.

Mr. Kenneth Lewis: More years ago than I care to remember, when I first came into active politics as a young Conservative—in those days we were called the Junior Imperial League, but we have since lost our Empire—I thought that unemployment was the greatest scourge in social terms. I have not changed my mind.
A debate about unemployment must enable us to discuss how we can create more jobs. It is not a debate about how we make the nation more efficient because if one can make a nation more efficient only by creating more unemployment, if one is in Government or a party behind Government, there is something wrong. People do not expect Governments to solve problems of efficiency, new technology and so on in industry by allowing unemployment to rise.
Listening to the Opposition, one gets the impression, as one might expect, that the Government are wholly to blame for present unemployment. The truth is that there is unemployment in the whole Western world. The Western world has to decide how it can best solve that problem, because if it does not, society and the whole Western world will go more and more to the Left. The Government have a high unemployment rate, partly due to the international situation. There is rising unemployment in Europe, in the countries of our main competitors and also in the United States.
Unemployment has also risen because of some self-inflicted wounds. I have not yet heard much about that in Opposition speeches. The hon. Member for Glasgow, Maryhill (Mr. Craigen) did not mention the fact that in recent years the trade unions have produced policies that have been agreed even by the Trades Union Congress—which should be more responsible, although

some of its constituent unions are not—which have put their own members out of, work. Those policies have priced their members out of jobs.
It is remarkable that even today while we are discussing an escalating rate of unemployment a railway union is on strike. That strike is losing British Rail £6 million a day, thereby putting it further into the red and making it more difficult for it to employ people, let alone increase the pay of those it employs.
The Western world is also faced with the employment effects of the new technology. We have a backlog of problems brought about through not having faced up to it over the last few years. The Minister spoke about that. The new technology is gathering momentum and coming on stream much quicker than Governments, people in industry and myself thought likely. That momentum has been given a push by countries in the Far East such as Japan, Taiwan and Hong Kong that are forcing the pace.
Have the Government got a plan for dealing with new technology in relation to its effect on jobs? As fast as Government stimulates new jobs other jobs may be lost, because, as technology develops, it cuts back the labour force.
It is time that a Cabinet committee was set up to look ahead to the need for reduced hours, an earlier pension age or whatever to deal with this new technology. We need an "Industrial Beveridge". We had a Beveridge during the war to provide a report on welfare needs after the war. We now need an industrial Beveridge to assess what can be done to deal with the need for less work. If we have no plan and just sit and wait for things to develop, what will happen is that 3 million unemployed will become 4 million and 5 million and no Secretary of State for Employment will be able to do anything about it.
We know that 3 million unemployed now is too many and that it blights young persons, who grow from school into adulthood without getting other than temporary jobs or skills, believing that there is no permanent job ahead. We know that the careers of people in their fifties are spoiled when they suddenly find themselves out of work and are unable to get the promotion that they were expecting when they were in their forties. That is a devastating thing to happen to anyone.
The total number of unemployed will grow in the short term, as the Secretary of State said. He could give us little comfort on that, not only in his speech but in various television and radio performances in the last two days. Unemployment is not something that he can exactly control. The ghosts of the 1930s are walking abroad. As I said, I came into politics to try to exorcise those ghosts.
We have to ask two questions, however. Where does the responsibility of Government lie and what can the Government do about unemployment? The Government are not responsible for all the unemployment but, I believe, their policies are responsible for some of it. If some of my hon. Friends say that no part of the Government's policy is responsible for any of the unemployment I can only say that we cannot persuade the people that that is so. Where people rest their votes they expect their problems are rested. When people elect Governments they expect those Governments to help solve the problems.
What can the Government do? Clearly they must do something to try to stimulate and initiate new jobs. People do not expect miracles. I do not believe that, coming to the next general election, the people will expect a miracle.


However, they will expect some progress and light at the end of the tunnel. They will not accept the word from the driver on the train—the Prime Minister—or from the guard—the Chancellor of the Exchequer—that the light is coming at the end of the tunnel. They will expect to see that light themselves.
The Treasury and the Government cling to one or two fetishes that are debilitating any opportunity of improving the situation. First, the Government have a good record on inflation, which they are bringing down. At the end of this year I believe that inflation will have come down to 7 or 8 per cent. The Treasury should make do with that until the next general election. If they try to bring inflation down lower, to 5 or 4 per cent., they will leave nothing to be done in the next Parliament and they will ruin their chances of bringing down unemployment and, therefore, of winning the next election. That is one fetish to go slow on.
I am pressed frequently, as we all are, to reduce Government expenditure. Again, the Government have a good record in the reduction of expenditure. When Ministers are looking at further possible cuts in expenditure they should ask themselves if whatever they propose will mean the loss of many jobs. With rising unemployment I do not believe that it is acceptable that Government expenditure should be cut in those areas where it would result in the loss of more and more jobs.
The third impediment that is causing problems is the Treasury's wish to hold down too tightly on the borrowing requirement. It is lower today in percentage terms than it was in 1970 and 1974. We have North Sea oil and we have just had an announcement of the most successful trading month and of an accumulation of successful trading months. When the country as a business is making money in every direction it does not seem to make sense that it cannot borrow more. Any company that is making money strongly can borrow easily. The Government ought to be able to relax on the borrowing requirement by at least £3 billion when the Budget comes up.
What should the Government do with that £3 billion? They should first recognise that they control a large section of the economy. In the Conservative Party we believe that the Government control too much of the economy. The Labour Party took more and more into the public sector. The Government have been handing back to the private sector from the public sector as much as they could, and quite rightly. They could not do it all in three years. They cannot do a great deal more in the next two years. They can do a bit but there is a limit.
The Government will, therefore, still have, in the public sector, a large area of activity. In the private sector labour is being cut because of new technology and because of trade being less buoyant. Therefore, there will be a limit to new jobs in the private sector. That is why I believe it is necessary for the Government to boost the public sector, that sector that they might wish they did not have but with which they are stuck, to make up for what the private sector cannot do.
We need a capital works programme, and it needs to be spread about. I am not one of those who believe that the Channel tunnel is necessarily the right kind of capital programme at this moment. It is too slow to come on stream in terms of jobs. I want capital programmes in housing, building, local government and roads—the kind of things that employ people in various parts of the country, because unemployment is not now in only one or

two areas. It is all over the place—in the West Midlands, the East Midlands, the area where I have my constituency and where we never expected to see it at anything like so high a level.
Next, the Government need to help private industry by cutting some of the weight of taxation—not corporation tax, but the national insurance surcharge. We can take £ billion or more off that.
We hear a great deal about what the Government have done for small businesses. They have done a great deal for new business start-ups, but my hon. Friend the Minister for Industry and Information Technology might look at existing small businesses to see whether they could do with a little support, with a reduction in Government taxation. It is pointless to start new small businesses if some of the older small businesses find the climate so difficult that they fall flat on their backs.
I fought in the 1945 general election. There are not many hon. Members left, on either side of the House, who fought in that election. All of us on the Tory side thought that we would win, but the then Government lost heavily. Many who expected to gain seats lost, and some who held safe seats lost them. The Tory party's defeat in that election arose from a myth, one that stuck, after being propagated all through the war in the Daily Mirror. The myth was that the Tories had created unemployment in the 1930s. It was indeed a myth, because when the Labour Party was in office unemployment was at its peak between 1929 and 1931. It was the Tory Government, from 1935 to 1937, that started to bring unemployment down.
My father was out of work for two years during that period, and he was in and out of work after that. That was when I said that I would never sit quietly if such a problem were repeated.
We have two years before a general election. We must be careful to see that the old myth is not attached to our party when we enter that election. We must begin to bring unemployment down, and show that we are in business by being successful in doing so. We do not even have to get it below the 2 million mark—I do not think that arty Government can do that now—but if we do not bring it down and are not seen to be giving people hope we shall not be fighting a myth this time. The myth will have become reality.

Mr. David Lambie: One of the important aspects of this debate, as those of us who have been present since the beginning will recognise, is that no one, apart from the Secretary of State for Employment, has yet spoken in support of the Government's policy. Irrespective of party, every hon. Member who has taken part in the debate has spoken against Government policy and called for a change in it.
We are more than halfway between elections, and Conservative hon. Members are beginning to realise that soon they will have to fight an election. Going to the country with 3 million unemployed—or 4 million, as I think it will be next year—they have not a snowball's chance in hell of being elected.
In Scotland, it is not a myth that the Tories have always been the party of unemployment. They were the party of unemployment during the 1930s, and they are the parry of unemployment again today.
Part of my speech has already been made by the hon. Member for Rutland and Stamford (Mr. Lewis), who made


a good Socialist speech and provided a good Socialist solution. It was much better coming from the heart of the hon. Gentleman, as a Conservative, than from many of us on the Opposition Benches who have experienced the problems of unemployment in our own areas and sometimes speak from the head as well as the heart.
There are 3 million unemployed. The Prime Minister has said that there are encouraging signs, but the Secretary of State said on the radio yesterday that a more honest estimate of the future was that we had not reached a peak and that we should still see unemployment rising.
Many hon. Members have said that unemployment is now a national problem. In the old days an hon. Member from an area of high unemployment, such as Scotland, had no problem when he wanted to take part in debates on unemployment, because the only hon. Members who were interested were those from Wales, the North-East of England and Scotland. One did not need to put in one's name. One was called immediately, because the House was empty. Now it is difficult for us to take part, as hon. Members from the North of England, the Midlands, London and the South-East are demanding the right to speak about unemployment, because it affects them. Although they cannot equal the averages that we experience in the old industrial areas, they can prove that the increase in unemployment is much higher in their areas than in the old heavy industry areas.
My right hon. Friend the Member for Chesterfield (Mr. Varley) said that the whole country was a distressed area. That is correct, but some of us represent what can only be described as disaster areas.
Unemployment last reached the 3 million mark 49 years ago—in 1933. The apologists for the present level say that the problem is not so acute today, because in 1933 the rate was 22 per cent., whereas the average over the United Kingdom today is 12·7 per cent. Their percentage for the United Kingdom is correct, but in Scotland it is 15·3 per cent., and yesterday in my area it reached 24·7 per cent. Not only is unemployment in Central Ayrshire much higher than it was in the the 1930s, but it is now more than double what it was there. It is hitting every family. Unemployment at 24·7 per cent. makes my constituency the black spot for unemployment in the United Kingdom. It has the highest district rate of unemployment in the United Kingdom. Male unemployment is now 28·9 per cent. In the Garnock valley, which is a steel area where the open-hearth furnaces have been closed, the male unemployment rate is 33·6 per cent. If people working on the short-time subsidy and young people doing dead-end jobs under the youth opportunities programme are excluded, in the Garnock valley nearly every second person is unemployed or facing unemployment.
I do not think that hon. Members representing English constituencies, whether Labour or Conservative—especially in the South of England where the average is 12 or 13 per cent. unemployment—understand the seriousness of the problem facing the people in Ayrshire and the West of Scotland.

Mr. David Clark: The same applies in the North-East.

Mr. Lambie: My hon. Friend points out that the same applies in the North-East. These people come from areas which we would consider prosperous. If Central Ayrshire

had an unemployment rate of 12·7 per cent., I should consider it to have full employment, because it has never had such a low level of unemployment.
I am not looking for a miracle. I am not asking the Government to introduce Socialist policies or to carry out the demands made by the hon. Member for Rutland and Stamford, who wanted increased public investment. I hope that at the crisis meeting of the Cabinet tomorrow there will be a majority for some change in the Government's policy. We need a U-turn. If we do not get it, unemployment will rise to an unacceptable level. I sometimes wonder why my constituents are so complacent about and accept unemployment. I do not think that the people of Britain will accept unemployment at the 4 million mark. We are heading towards a dangerous situation.
At the beginning of the year Cunningham district council called a crisis meeting to deal with the problem of unemployment. We brought together the regional councillors, the district councillors, the Members of Parliament for the area, the Scottish Development Agency, the PSE industries, and every group that could do something to ease unemployment. We made an estimate of the problem, what solutions were needed, and asked the Secretary of State for Scotland to arrange a meeting. We have not yet received word from the Secretary of State that he is willing to meet us. Yet the area is the unemployment black spot for the United Kingdom.
I hope that the Secretary of State for Employment will take my complaint to the Prime Minister. Why is the Secretary of State for Scotland not here today? Why is the Minister at the Scottish Office with responsibility for industry not here? Where are they? Scotland has the highest regional unemployment rate in the United Kingdom and the appropriate Minister is not present. He has not been here today. We have had one or two Ministers for Scotland, but they have no responsibility for industry. The Secretary of State for Employment should take this matter up with the Prime Minister.
If this is a mark of the interest shown by the Scottish Minister with responsibility for industry in an employment debate, he should be out. We hope that the Prime Minister will reorganise the Scottish Office. She has got rid of the Solicitor-General. I hope that she will take this opportunity of getting rid of the Secretary of State for Scotland and the Minister with responsibility for industry at the Scottish Office at the same time and appoint somebody who will at least attend debates.

Mr. Tebbit: I shall certainly inquire what it is that has kept my hon. Friends away from the debate, and the hon. Gentleman's speech. I shall mention to the Leader of the Opposition the absence of the Shadow Secretary of State for Scotland at the same time, if that will help him.

Mr. Lambie: It is no use making excuses. No one in Scotland can justify that the Secretary of State is not here or that the Minister of State for Scotland is not here when he is directly responsible for the manpower services in Scotland. He does not have to go through the Secretary of State for Employment. I hope that point will be taken up.
I hope that the Secretary of State for Employment will find out from the Prime Minister why the Secretary of State for Scotland has not answered Cunningham district council's request for a meeting, especially as the area is the black spot for unemployment in the United Kingdom.

Mr. Craigen: My hon. Friend may know that the Shadow Secretary of State for Scotland was here, but walked out in disgust after he had heard the statement by the Secretary of State for Employment.

Mr. Lambie: Perhaps he should have waited to hear me.
To give some idea of how Scotland has been discriminated against—because we have weak Ministers who are interested not in the problem but only in the glory of position—I should like to draw the Secretary of State's attention to another point.
On 13 November the Under-Secretary of State for Industry announced details of a new enterprise allowance. The Manpower Services Commission, in a press notice, said:
Under the scheme, the MSC will pay an 'enterprise allowance' for up to one year to provide a regular income during the early stages of a new business. Applicants will have to live and propose setting up their business in the pilot areas.
I have recently been interested in the setting up of a workers' co-operative with unemployed construction workers. I thought that here was a good idea to get them launched. I applied for the new enterprise allowance, which would give them the opportunity of still receiving their unemployment benefits, or a sum equivalent to that, during the first year of the operation of the new company. I contacted the office of the Manpower Services Commission in Scotland and asked for information about the new enterprise allowance. The MSC replied:
The pilot scheme will start on 25 January and applications will be taken until March 1983. The Government has made available just over £2 million to finance the scheme which should allow about 1, 500 successful applications.
I thought that was a good idea, and I wanted to apply for the co-operative to receive the new enterprise allowance.
I then discovered that the pilot schemes were not to be found in Scotland. They were in Coventry, the Medway towns and North-East Lancashire. There was not one in Scotland. I represent the unemployment black spot for the United Kingdom, but it does not qualify for the new enterprise allowance.
I was told that the Minister responsible for industry in Scotland read about the scheme in the newspaper. The Government started a new initiative and did not even tell the Scottish Office that the initiative did not apply to Scotland. The Minister read about it in the newspapers. He will also read about this debate in the newspapers tomorrow. He will read about it and say "I am sorry".
I should like to know from the Secretary of State for Employment why the north Ayrshire area is not part of the pilot study. Is this discrimination against Scotland, which has the highest unemployment rate in the United Kingdom? I suggest that we forget about the Scottish Minister. I should like to hear an assurance from the Minister who is to reply to the debate that the north Ayrshire area will be included in one of the pilot zones for the new enterprise allowance.
Unless the Government change their policy, unemployment will rise to 4 million. My hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) said that regional policies had failed. I agree with him to some extent. But regional policies work only within the framework of Government economic policy. It is Government economic policy that has failed. I hope that the Government will change their policy at tomorrow's Cabinet meeting. If they

cannot change their policy with the present Prime Minister, they should ask her to go. She has outlived her usefulness as Prime Minister.

Mr. Kenneth Carlisle: There have been many debates on this subject during the three years that I have been an hon. Member. The seriousness of the problem has been recognised. All parties are concerned that unemployment stands at 3 million. I take a contrary view to that of the hon. Member for Central Ayrshire (Mr. Lambie), who assumes that compassion is to be found only on the Labour Benches. Concern is felt just as keenly on the Conservative Benches, as shown by my right hon. Friend the Secretary of State and also by my hon. Friend the Member for Rutland and Stamford (Mr. Lewis).
There is general recognition that the present level of unemployment cannot be tolerated for long, not only on human and economic grounds, but because a democratic and capitalist system would be put under intolerable strain if it continued. I am surprised that the Opposition often treat this subject so frivolously. They suggest that unemployment is the creation of the last two years. In their hearts they know that today's problems have grown from the mistakes of 20 years or more. The cause can be found in the deep structural problems in our way of life and our economy. To suggest that the crude remedies put forward by the Opposition will succeed is no succour to the many unemployed who genuinely want work.
People know that more reflation and the pumping of money into an unreformed economy, as suggested by the Opposition, will merely fuel inflation and create further unemployment. That is surely the lesson that history has taught us. If we are to show genuine concern for the unemployed, we must also have the rigour to lay open the real causes of the disease. That is what my right hon. Friend the Secretary of State tried to do. In the same way, compassion for the elderly is shown not simply by mouthing concern, but much more by demonstrating where the money and effort can be found to tackle the problem. Our unemployment is part of a world crisis. It is also partly of our own making over the years.
Despite our trading strength, we no longer possess sufficient clout in the world to change events greatly. We are, however, responsible as a society for what happens in the United Kingdom. Events in Poland during the last year have shown how an economy can disintegrate through the inability of a country to create the right political and economic system. Poland has perhaps an excuse. Its system is imposed from outside. We have no real excuse. We possess the freedom to find our own solution. Before that can happen, we have to recognise and face the cause
Our unemployment has been caused overwhelmingly by our inability to compete. Our failings have perhaps been disguised over the past 20 years by a falling pound and unprecedented world prosperity. A world recession has ended this process and made us face our problem fully. It is possibly nostalgic to think of those days following the Second World War when Britain possessed over 40 per cent. of the world market for ships. The figure is now less than 3 per cent. Even 15 years ago, we and the French were producing 1 million cars each a year. Now we produce fewer than a million, while the French make 3 million.
If only this country had remained competitive in these two fields, one can imagine the extra jobs that would now


be available, not merely in building ships and producing cars, but in the supplying industries, such as steel, engineering and electronics. Our inability to compete in those two spheres has been mirrored elsewhere. The effect on unemployment has been catastrophic. It is sad even today to see ASLEF pulling the railways in the same direction. Unless the railways become as productive as possible their plight will echo that of shipbuilding and even more jobs will be lost.
Any Government who are genuinely concerned about unemployment must look to the central problem of our ability to compete. At the heart of the problem is our record on productivity and unit costs. It is only fair to recognise the outstanding achievements of the Government, which have brought home to the public for the first time since the war a sense of understanding of the reality of the problem.
One has to understand the problem if one is to find a solution. Opposition Members must face that. People now accept that a solution to the crisis of unemployment lies to a great extent in our own actions. As a trading nation we have to match and then beat the very best in the world. The realism of recent pay settlements and the wholesale abandonment of restrictive practices are proof of this growing sense of realism. The first step that we have achieved is therefore an understanding of the problem.
The results of this realism are beginning to show. They will be remarkable. We should speak of these growing areas of success consistently and proudly. Our unit costs, which were stressed by my right hon. Friend the Secretary of State as being so important, are rising at a rate of only 2 per cent. a year, the lowest of any industrial country. I hope that that will be welcomed by the Opposition. Individual stories in various industries are just as good. There has been the much publicised success of some of the public corporations. Productivity in British Steel has grown dramatically. Hon. Members welcome the success at Llanwern. At British Leyland, productivity on the Metro is as good as that achieved on the Continent.
Most achievements occur in the private sector far from the glare of publicity. A recent interesting survey carried out by the CBI in the West Midlands promises great hope. The report stated that companies throughout the Midlands had undergone change and improved performance on a scale sufficient to raise hopes of an economic resurgence. Of the 197 companies covered by the survey, the majority have introduced new products, and even whole new product ranges in the last two years. New technology has been introduced and efficiently and productivity raised. Seventy per cent. have broken into new markets, half have expanded exports, and many have more than doubled exports.
In the very tough conditions, with a high pound, that have prevailed during this time, that is a tremendous achievement. It is happening both in the West Midlands and in the East Midlands and elsewhere throughout the country, even, I am glad to say, in Scotland. Hon. Members would be wrong to underestimate the massive structural changes that are taking place. These offer the best hope for the future. The managements and work forces that are now earning success deserve to be congratulated. A change need not bring unemployment. Japan, where new technology has been embraced more

vigorously than in any other country, has only 2 per cent. unemployment. If we do not do these things, our unemployment will become worse.
The Government have been active in establishing the structures within which work can be created. In many ways that is the real role of the Government. They must create the structures within which we can develop our energies. One such success, of which the public perhaps knows too little, demonstrates what the Government have been doing. It is the setting up of the projects and exports policy division of the Department of Trade. That was established in 1980 to co-ordinate the full range of Government services which help firms pursuing major overseas projects. The new division has helped.
We are now winning huge export orders which total more than ever before. Included in those orders are an Indian steel plant worth £1·5 million, a power station in Hong Kong worth £1 billion, a mill contract in Mexico worth £330 million and a university in Oman worth £150 million. They are diverse projects, but they all help to create jobs in numerous small businesses in Britain which supply materials for those massive contracts. In that and in other ways the Government have created the climate for change. They have given good help where the Government have a genuine role.
We must recognise that if our competitve ability is to continue to improve the Government must achieve more. They must continue to attack inflation and to do their best to hold interest rates down. Both steps demand a sensible rather than a rash reflation.
I ask the Opposition parties, and some of my hon. Friends, to consider the danger which an over-hasty reflation would bring, with increased inflation and even higher interest rates. Just as important is our need to curb public sector costs. We must succeed in that respect this year. For too long the Government, by failing to curb public sector costs, have put an unfair burden on the struggling private sector, which, rightly, has complained ceaselessly.
The goals of reflation, lower interest rates and lower public sector costs must be achieved to improve our ability to compete. One cannot pretend that our competitive ability will solve unemployment just like that. One must not take too narrow a view of the problem. It is essential to create the wealth that can give us the economic freedom to tackle the crisis in a serious manner.
For example, if we generated sufficient wealth we should be able to extend even the excellent new training initiative announced by the Government, under which spending on the young is to be doubled. We could also develop a national community service, about which there has been much talk. We could look for even earlier retirement and we could establish more meaningful training for people who are made redundant in middle age.
Increased vigour in the economy would spawn many new businesses. All types of schemes could spring up in the community and they would employ people constructively. All such ideas—education, training and community schemes—have to be funded ultimately by competitive business.
The Government have an understanding of the central problem. They have examined the heart of our national problem. There are growing signs that success can be won. I believe that the Government have the determination to win through to that success. Only when we are truly competitive can we hold out real hope that unemployment


will be diminished and that many more people will find work. That is the goal that the country, the Government and the Opposition wish to achieve. Only if we are competitive can we seek to achieve that goal.

Mr. Doug Hoyle: The hon. Member for Rutland and Stamford (Mr. Lewis) is about to leave the Chamber. He made a constructive speech. I was sorry that he was not speaking from the Front Bench. The Secretary of State made a disgraceful speech. From him we heard the most unfeeling comments from the most uncaring person in the House. He showed that he was prepared to sacrifice the people on the anvil of political dogma, whatever the cost. He did not have the humility to say to the House that in the two years that the Government have been in power unemployment has doubled. He did not say, as he might have, that during the last 18 months of the Labour Government unemployment went down month by month. The trend was towards a reduction in unemployment. If we are to have a constructive debate we must start from there. It is not true to say that there is no solution to unemployment. We were showing that there is. The tragedy was that we were not in power to continue that trend.

Mr. Tebbit: The hon. Gentleman could not have been listening carefully. I said that during the latter part of the Labour Government's term of office unemployment was falling. I referred particularly to it as being one of the benefits of the time when the IMF dictated economic policy to the Labour Government and it came through after the normal lag that one expects with unemployment figures.

Mr. Hoyle: The Secretary of State referred to the latter months of the Labour Government. I said that unemployment was reduced over the last 18 months. The trend continued. We were developing our policies and they would have carried us to prosperity. The Secretary of State did not explain the reversal of those policies when his Government came to power. That is what led to a doubling in unemployment. It will not stop there. Unless there is a change in policy along the lines outlined by the hon. Member for Rutland and Stamford unemployment will reach 4 million. At what point will the Government begin to reflate to bring down unemployment? We failed to get an answer from the Secretary of State.
The Secretary of State provided no recognition that the Government were to blame. I was dismayed by the lack of recognition of what lies behind the statistics. We are talking about 3 million unemployed, the poverty of our people, the despair and the tragedy in the regions. There is no hope. Somehow we must restore hope. There is no sign from the Government Front Bench that the lesson has at last been learnt.

Mr. Tebbit: I am sorry to intervene again, but the hon. Member is an old friend and he is being indulgent. What makes him think that inflationary policies reduce unemployment? The fall in unemployment during the Labour Government's period in office came after the appropriate lag following the institution of IMF policies. That was the whole point. When the policies were reversed in the latter part of the Labour Government's period in office they stoked up matters ready for the great rise in unemployment again. It is simple.

Mr. Hoyle: There we go again. The right hon. Gentleman is not prepared to accept any responsibility. At one time he was a pilot. That was before he went into bicycling. If he had flown a plane in the way in which he is running the Department of Employment it would have crashed long ago. Unfortunately, he is taking the country in that direction. Neither he nor the Cabinet will take any of the blame for what has occurred. The problem cannot be solved in that way. Now we need not more deflationary measures but expansion. The hon. Member for Rutland and Stamford said that in his able and courageous speech. I only hope that some of that comes through at tomorrow's crisis meeting of the Cabinet.

Mr. Campbell-Savours: Could it be that the Secretary of State was wrong when he suggested that the cause was the IMF's intervention when it was in 1976 that the Labour Government decided to pursue an incomes policy in agreement with the trade unions?

Mr. Hoyle: My hon. Friend makes an interesting point. However, that was not the reason for our recovery. I am sorry that I cannot address my remarks to the right hon. Member for Crosby (Mrs. Williams) because after she spoke she left the Chamber.

Mr. Arthur Lewis: The right hon. Lady always does and she always has.

Mr. Hoyle: Indeed, for long periods during this important debate, there has been no representative of the Social Democratic Party in the Chamber, and there is now no representative of the Liberal Party present. That shows the contempt with which they view the unemployed. That does not surprise me, because I have always thought that the SDP was a party more interested in dinner suits than boiler suits. It is more interested in dining rooms than board rooms and more interested in fashionable places than work places. The absence of SDP Members proves once again the contempt in which they hold the House. They would far rather go about the country than be in the House where policy can be effected.

Mr. Ian Wrigglesworth: Will the hon. Gentleman also point out to the House that for most of the time that he and his predecessors have been speaking there have been only about 10 out of over 200 Labour Members present?

Mr. Hoyle: That is a higher proportion than the proportion of SDP and Liberal Alliance Members, which has been nil. When, nought is multiplied by any number, it is still nought.
There is only one way to reduce unemployment. I say to my hon. Friend the Member for Workington (Mr. Campbell-Savours) that it cannot be done by an incomes policy. It can be achieved only by trying to plan our economy and by trying to get public investment going again. There is a theory on the Conservative Benches that there is no connection between the public and private sectors. The prosperity of the private sector depends upon the prosperity of the public sector.
We need a vast investment in the public sector. We need about £24 billion over the next four years. It seems that the right hon. Member for Crosby is trying to steal the clothes of the Labour Party by going for investment in the public sector. I disagree with her on the scale of that


investment. It must be far higher in the first year due to the collapse of the economy under the Conservative Party. That figure must be in the region of £8 billion.
All Labour Members have their favourite targets in the public sector. They may be housing, the Health Service, the gas pipeline, electrification of the railways or the Channel tunnel. All such projects would create jobs. However, that would not be enough because we must stop the export of capital overseas that has occurred under the present Government.
By removing exchange control restrictions, we find that pension funds of British workers are being invested in Japan to put British workers out of work. That is ludicrous. We should set up a national investment bank and use some of the pension and insurance funds to back it. We need to draw in the new science and technological industries of the future. We should be investing in biotechnology. This could create new jobs and initiate a breakthrough in pharmaceuticals, help to cure disease and use waste to create cheaper fuel.
All this is possible. The tragedy is that while the Government are talking about short-term measures our competitors are investing in new industries, as they have been for some time in microelectronics. This is where we should be going in future. However, once again we are falling sadly behind.
Whenever Conservative Members speak they bemoan the fact that we are not as competitive as many of the countries with which we must compete. The real reason for that is that investment has not gone into those industries in the past. That is what has happened in the shipbuilding and the motor industries and it is now occurring in the electronics industry. The only way to achieve investment in those industries is through public investment. That is the way to get back. It may be painful for the Secretary of State to listen to this, but I can assure him that that is not as painful as having to listen to his address today. It can be done and there is only one party to do it.

Mr. Renton: Will the hon. Gentleman give way?

Mr. Hoyle: I am sorry, but I shall not give way. The hon. Gentleman has only recently returned to the Chamber. He has been absent for most of the debate.
We can carry out those policies only by planning. We can do it only be extending the public sector. That is the way to move forward. Only the Labour Party has the plan to do it. I believe that the Labour Party can do for Britain what Roosevelt did for America during the depression years. We can begin to bring a new spirit and to revive our economy. The sooner we get the opportunity, the better, because the people, particularly the unemployed, are crying out for a change of Government.

Mr. Keith Wickenden: I hope that I shall be forgiven if I begin my speech with a gentle criticism. The problem of unemployment is too deep-seated, too structural and too important to be the subject of the many petty party political points that have been made during the debate.
We have heard many statistics. As an accountant, statistics are always highly suspect to me. However, there is one statistic about which every one of us should be ashamed, and about which the unemployed and the nation

will be infuriated if they come to hear it. During the past two and a half hours, 96 per cent. of right hon. and hon. Members have not been present. To be absent for a debate on such a serious issue, one of the most serious problems facing the country, is a matter for shame and nothing else.
I have tried hard to listen to all of the speeches in the debate. I have heard again and again expressions of concern and worry, but very little in the way of constructive suggestions. The first suggestion from the Opposition Benches was not made until the speech of the right hon. Member for Crosby (Mrs. Williams). The right hon. Lady suggested that what was needed was a public investment programme of £5 billion to £6 billion. She did not explain how it was to be paid for. She did not say that if it were to be paid for by increased borrowing the inevitable result—as we have seen for the past 30 years—would be an increase in inflation and, after a short period, a further increase in unemployment. That is the inevitable result of public sector borrowing and it cannot be avoided.

Mr. Ron Leighton: No.

Mr. Wickenden: The hon. Gentleman says "No", but that is the history of the past 30 years. Surely no intelligent person could gainsay that.
If we are to increase public sector borrowing, we must realise precisely what that will do to every family, including the unemployed. The present level of public sector borrowing, by which I mean Government and local authority borrowing, is £150 billion. To convert that into figures that at least I can understand, it represents more than £10, 000 for every family in the country, including the unemployed. All those families have to find almost £20 a week in tax to pay the interest on public sector borrowing that has been incurred to sustain a standard of living that has not been earned. Some wish to increase it still further. The measure of irresponsibility that that implies is, in my view, outrageous.
In addition to there having been few suggestions on how we should cure unemployment, there has been little understanding of what creates employment. I was astonished to hear the hon. Member for Warrington (Mr. Hoyle) say that the only reason why British industry is uncompetitive is that we have not invested sufficiently. It is true that we have not invested enough, but that is only one facet of the problem.
I refer the hon. Gentleman to a survey that was carried out by an independent American consultancy team, which contrasted the performances of two almost identical factories with modern production plant, one at Speke in Liverpool, the other on the Continent. The Continental factory was nearly twice as competitive and efficient as the British one. It does the unemployed no good for hon. Members to bandy about false facts and to hide from the truth.
The cause of unemployment, like the cause of most things, is terribly simple. The cure, unfortunately, is not so simple. The cause of unemployment is simply that our factories and centres of service industries no longer sufficiently provide goods and services at prices which the rest of the world is prepared to pay. If they did, the rest of the world would flood to our shores for those goods and services and we should have no unemployment problem.

Mr. Hoyle: I have listened with rapt attention to what the hon. Gentleman has said. In the textile industry, 


although many factories are old-fashioned and family ownership is common, people have invested—albeit a little late—and are investing much money and have created a modern industry. There are no restrictive practices. Indeed, the unions have bent over backwards to assist. The textile industry has been destroyed by the flood of cheap imports, so the picture that the hon. Gentleman paints is not always true.

Mr. Wickenden: I accept that the textile industry faces special problems, but the hon. Gentleman's point bears out what I have said. We are not producing goods as competitively as other countries.
I have considerable experience of the shipbuilding industry. I regret that I have been forced at times to place orders abroad, not always because of price—although, regrettably, British prices are not always competitive—but simply because British yards were unable to meet the required delivery dates and competitors abroad were. That is dreadfully sad.
I return to my main theme. We concern ourselves, rightly, so much with unemployment that we do not spend enough time looking at the true answer, which is the creation of real employment. I readily accept the criticism made by the hon. Member for Central Ayrshire (Mr. Lambie) that those of us from more fortunate parts of the country do not have direct experience of the tragedy of unemployment, and I concede that I represent a fortunate constituency. In Surrey we do not have anything like the problems faced by other parts of the country. We have a great deal of industry, but it is more diverse and not engaged in the heavy trades.
Although I have no direct experience of unemployment, I hope that I am not being too immodest if I say that I have considerable experience of creating employment. The company with which I have been fortunate enough to be associated for the past 10 years has, in the past 15 years, increased the number of its employees from 300 to 7, 500. I am proud to have played some small part in the creation of that employment. The only way to create employment is not to create fictitious jobs, although that is a palliative and will do in the short term, but to encourage those sections of industry that are capable of growth in such a way—not by subsidy, which usually does more harm than good—that they develop through organic growth.
Our major employers have slimmed down considerably in employment terms over the past three or four years. Most of them have now reached the stage at which they are almost uniquely in a position to compete with many of our foreign competitors. I do not for a moment believe that if the world recession were blown away tomorrow major areas of private industry would take on large numbers of employees. Nor do I believe that the State industries would do so, because, as we know only too well, they are for the most part heavily overmanned.
If those two major employment sectors do not do that, and if we are not to have unacceptably high unemployment for ever, we must ask ourselves where employment is to come from. I believe that we must look at the way in which we created employment in the first place. ICI and GEC were not created overnight. Incidentally, I should say with a certain personal bitterness that if the Office of Fair Trading and the Monopolies and Mergers Commission had been as active in the 1960s as it is in the 1980s GEC would not have been allowed to happen, which would have been a disaster in terms of unemployment.
We must go back to the small industries that were created in days gone by and formed the cornerstone of the whole of our present industry. It is not just a question of pouring money into them. If there is one lesson that we should have learnt from our regional aid policies it is that, sadly, so much of the taxpayers' money that has been put in has been wasted. If the Opposition do not believe that, I will give examples.
Only last week we debated the tragedy of the Invergordon smelter, which has cost the taxpayer £100 million to provide 900 jobs for a relatively short period. That is more than £100, 000 per job.

Mr. Campbell-Savours: Many more jobs than that are involved.

Mr. Wickenden: In all the discussions last week, the figure was 900. If that is not correct, the Opposition were citing incorrect figures. But even if it were double that figure, that would still be £50, 000 per job. How much could be done with £50, 000 in a small business to employ three or four people and really create something, rather than trying to create a fictitious industry, which at the end of the day failed?

Mr. John Home Robertson: The hon. Gentleman oversimplifies the situation. Organic growth of the type that he describes might be possible in Dorking, but how on earth can he expect to create the kind of employment necessary to revitalise central Ayrshire, or Easter Ross, where Invergordon is, without massive public expenditure of some kind?

Mr. Wickenden: I shall give a perfect example. Last year the Dunlop Rubber Company closed an old factory in Coventry. Unemployment is as grave in the West Midlands as anywhere else. That factory, built in the 1920s, was closed with the loss of a considerable number of jobs. If it had remained empty for long, it would have been demolished. Due to the foresight of a business acquaintance in Coventry, my company was persuaded to buy the factory at a knockdown price and to invest a relatively small sum in turning it into 28 small factory units ranging in size from 800 sq ft to 3, 000 sq ft. We advertised it once and 102 people applied, many of them wishing to start up in business with their redundancy money from Massey-Ferguson, Chrysler and other companies in the area.

Mr. Campbell-Savours: How many jobs w ill be created?

Mr. Wickenden: Three hundred jobs will be created. If somebody had not done something about it, there would have been none.

Mr. Campbell-Savours: The hon. Gentleman makes a very important point. He is trying to prove that this would work in our constituencies in the Northern region, and I should like to believe that it would. In the Northern region, many local authorities, in line with what the hon. Gentleman has said and in conjunction with private business, have tried to restore mills and convert them into units. In one case in my constituency a number of small nursery units are lying empty because we cannot get the kind of organic growth that the hon. Gentleman advocates. I only wish that it were possible to generate that growth. How can people in those constituencies be put back to work if the hon. Gentleman's theory does not work?

Mr. Wickenden: The hon. Gentleman said that it does not work, but it has done so in an area with some of the highest unemployment in the country. It has worked in Corby and other places. It cannot necessarily work everywhere, but it is something that has not been properly tried.

Mr. Tebbit: I agree with what my hon. Friend says. If it is any comfort to the hon. Member for Workington (Mr. Campbell-Savours), let me tell him that I saw such a scheme on a smaller scale in operation when I visited Middlesbrough last week. Small workshop factories of the sort described by my hon. Friend were being established in an old biscuit factory that had been taken over as a joint project between the Manpower Services Commission, the officials of my Department and the local authority.

Mr. Wickenden: I am grateful to my right hon. Friend. That is exactly the point that I am trying to make.
I give further examples of public investment in large companies that have not worked. There is the De Lorean works in Northern Ireland. I believe that the sum invested so far is £80 million, which created 2, 500 jobs, but sadly it now looks as if they are seriously at risk. Chrysler at Linwood never did work almost from the day it started, but perhaps the most monstrous creation of all was British Leyland, which was put together for all the wrong reasons—[Horn. MEMBERS: "Absolute nonsense."] I know a lot about how British Leyland was put together, because I was involved in many of the discussions that took place at the time. It should never have been put together in the first place. Sadly, it is probably too late to break it down into its constituent parts, which could be successful given the opportunity.
I spoke of the need for a completely different re-think and said that instead of trying to attack unemployment we should create employment. The problem goes much deeper than that. We need a truly radical look at the whole system of our economy.
Our tax system is absurd, in that direct taxation starts below the official poverty level. Therefore, as a nation we employ bureaucrats to give our citizens money with one hand through social security and to take it away, through taxes, with the other. One cannot envisage a more damaging or foolish system. Indeed, it specifically sets out to discriminate between those who work, those who save and those who invent and create. As a trading nation, we cannot afford to do that.
If we are to solve our economic and unemployment problems, we must go back to the root causes. We should look at things such as our taxation system and perhaps stand it on its head.
Housing is another reason why so many of our competitors have been able to cope with their unemployment problems more flexibly than we have done. Britain has the most inflexible housing system that it is possible to imagine, even though it was created for good and high-sounding reasons. We have a system of security of tenure—quite rightly—to protect the tenant, but in the process we have destroyed the very fabric of the private rented system. We have created a private sector of slums because we cannot provide the housing that our people demand.
Two years ago I took my son to Colorado in North America to train for a specific task. I went with him to find him somewhere to live and to make sure that he was

properly settled in in his training course. I asked an American colleague how I should find him some accommodation. He looked at me as though I was slightly mentally deficient and said "Look in the classified advertisements section of the newspaper". I did so, and for that small town in Colorado there were three full pages of flats to rent at very reasonable cost. They do not have security of tenure, and consequently a market is created. Our well-meaning policies actually hurt the people whom they are designed to help, and that is the tragedy of our system.
Had she been present, I should have liked to address a question to the right hon. Member for Crosby. She said—

Mr. Arthur Lewis: On a point of order, Mr. Deputy Speaker. On the last occasion on which the right hon. Lady spoke she left the Chamber immediately afterwards. I raised a point of order on that occasion. Once again she has made her speech and walked out. The hon. Member for Dorking (Mr. Wickenden) now wishes to refer to the right hon. Lady's speech, and in so doing will take more time and delay my hon. Friends who still wish to take part in the debate.
Until the new Social Democratic Party came along, the custom in the House was that hon. Members remained and listened to the debate. I again ask the Chair to point out that if a right hon. Member is lucky enough to use the back of the Labour Party to get a Privy Councillorship, which gives her privilege to get called whenever she wants, she ought to remain and listen to the debate.

Mr. Wickenden: I hope that the hon. Gentleman will forgive me if I do not follow him. Having complained about party political points earlier, I can hardly make one against the right hon. Lady now.
Perhaps another member of the SDP can answer my question. Reference was made to the need for an incomes policy. As a point of information, I genuinely want to know whether that means a permanent incomes policy, because I do not believe that any other sort of incomes policy stands any chance of success. We have tried incomes policies in the past and have always discovered that in the end the lid comes off, there is a mad scramble and the situation is exacerbated.
My remarks so far have been gloomy. I come to a few of the bright spots that exist. The right hon. Member for Chesterfield (Mr. Varley) referred, uncharacteristically and ungenerously, only to the record level of bankruptcies. It is perfectly true that the level of bankruptcies is now the highest ever, at 180 a week. It is also true that new businesses are starting up at the highest level ever—2, 500 a week. New company registrations in the first nine months of last year—during the Civil Service dispute when one would have expected registrations to be lower—were running at the rate of 1, 000 a week. They are bright spots which should not be overlooked. We should not always concentrate on our deficiencies. Occasionally we should concentrate on the good points.
Unit costs are now at more competitive levels than they have been for years, and our balance of payments is now healthily in surplus. That could provide for many of the things that we ought to be doing.
I draw a personal bright spot to the attention of the House. To my astonishment, I discovered only a few weeks ago that by volume my company accounts for about


45 per cent. of our nation's exports. No doubt that had something to do with the recent decision of the Monopolies and Mergers Commission. In the last two years the amount of freight carried by my company has been severely depressed, but 17 weeks ago an upturn began. At first we feared that it was yet another false dawn. It is not. That upturn has been sustained and is increasing. Most important and encouragingly of all for the nation, for the first time in four years the freight forwarders who place the orders are booking space six months ahead.
We shall never solve our unemployment problems until we tackle the root—the necessity to create real employment. We must do so in a way that does not drain the taxpayer or cause inflation, but which allows our nation's natural talents to flourish in the way that I know they can.

8 pm

Miss Joan Lestor: I entirely agree with the final sentiments of the hon. Member for Dorking (Mr. Wickenden).
My complaints about the Government are twofold. First, it is now almost three years since they came to office, yet they sit there today saying "There is nothing that we can do about it. We have not really found a way of creating more jobs and dealing with long-term unemployment", implying—and, in some instances, saying—that it is all the fault of the people in industry who ask for too much.
Secondly, and perhaps more important, the Government fought a general election on the basis of the Saatchi and Saatchi slogan "Labour isn't working", when unemployment was in fact falling. Unemployment has soared under this Government, while they sit there helplessly saying that they do not quite know what to do about it. If the Government continue to cut the purchasing power of the people who are in work and the purchasing power of the people who are drawing benefits, they will cause further unemployment, because people will not be able to buy the goods produced by the people in work. That is simple, basic economics, and that is the situation in which we now find ourselves.
I want to remind the House of something that the then Leader of the Opposition said in April 1979. She said:
But we Tories believe in policies that will create real jobs—not just in paying youngsters to do artificial jobs without a future.
Nevertheless, any youngster who reviews the schemes now before us knows that they represent an artificial job, a job that offers no guarantee of work in the future, and that society is saying to him "We shall keep you off the streets and keep you occupied so that you are not reflected in the unemployment figures". It is worth putting on record that between 60 and 70 per cent. of the young people on the schemes that were created under the Labour Government got jobs. I wish that it had been 100 per cent.
One of the worst aspects of the figures that we have been given is that a high percentage—40 per cent.—of the unemployed people are under the age of 25. That is a horrific figure. The tragedy is that many of those young people will be unemployable, if the situation goes on much longer.
The effect is rubbing off on our children and young people who are still at school who, instead of being able to say what they would like to do when they leave school, know that the prospects of doing what they would like to

do are becoming gloomier all along the line. The opportunities for many of them in higher and further education are being drastically cut, as we have heard during the past two weeks, and the schemes that are available to them offer very little. So the outlook is gloomy.
Long-term unemployment has doubled in the past year. That is a cause of grave concern to all of us. However, listening to the debate today, and indeed to debates on unemployment generally, what strikes many of us is that, in the main, people are talking about male unemployment, for many reasons, which I shall elaborate. Unemployment among women is rarely mentioned. However, yesterday's figures demonstrated that female unemployment has grown by 250, 000 since this Government came to office. Under the Conservative Government, female unemployment has quadrupled. Every month, an average of 12, 300 women come on to the the job market. That figure conceals the large number of women who do not register The figure given by economists now is that there are probably 2 million unemployed women workers in this country.
From October of this year, the unemployment figures will be compiled in a different way—on the basis of those claiming benefits, not those registering at unemployment exchanges. Thus, large numbers of women will be excluded from the official figures, including married women unemployed for more than one year and, of course, part-time workers.
A Government Minister recently said that a mother does not have the same rights as a father in work. The hon. Member for Aberdeenshire, West (Sir R. Fairgrieve), in a speech in which he sought to be constructive, spoke of how damaging it must be for a man to get up, not be able to go to work, and to see his wife doing the jobs around the house, and so forth. Society has not been like that for a long time. Unless we wake up to the fact that nearly the same proportion of women as men are financially responsible for dependent children, we shall still fail to understand the employment situation. In the main, women are not sitting at home being kept by husbands who are now becoming unemployed. Many women are the sole breadwinners in their homes, and many of them, married to men on low incomes, have been able to keep the family above poverty line. Only 18 per cent. of men in the labour force today provide the sole support for wives and their dependent children. So that is one matter that deserves consideration.
In areas where women are either the sole breadwinner—because the man's job has gone—or have been working to try to improve the family's standard of living, we now find that the wife's job, too, is threatened. That aspect has not been considered by the House tonight. Eighty-four per cent. of part-time workers are women who, in the main, are not covered by any redundancy legislation. Their jobs, in the main, are the first to go.
There is the scandal of the women in the school meals service. Many of them are not covered by redundancy payments. They receive no unemployment money, and they are not included in the official unemployment figures. Officially, those women have simply ceased to exist. When we talk about unemployment—and, as my hon. Friends have said, it is far higher than the official figure that was given—we tend to forget the large numbers of women, in particular, who are excluded from the official classification.
Mention was made earlier in the debate of the textile industry, and the way in which it has been decimated, in spite of the fact that, in terms of investment and co-operation, it is one of our best industries. Since 1979, 60, 000 jobs went in the clothing industry, where 90 per cent. of the workers were women. In the past two years, 50, 000 jobs have gone in the school meals service, and 100 per cent. of those workers were women. In the retail trade, 123, 000 jobs have been lost since 1979, and 70 per cent. of those employees were also women.
There is another matter that we should bear in mind. It was said earlier that unemployment was not regional, but spread throughout the country. That is true in areas such as mine, which has traditionally managed to escape the ravages of recessions. Now we have rising unemployment. I have news for the hon. Member for Bridlington (Mr. Townend), who said that one of the reasons for this was that we did not stop Commonwealth immigrants coming in. My area, which escaped this problem in recent years, and still has amongst the lowest unemployment figures, is also an area to which people have come from all over the country and from all parts of the world. To say that one causes the other is a way of trying to apportion blame in a society that should be looking for the fundamental reasons.
The rapid increase in female unemployment over the past two years has been in areas that were earlier called areas of industrial growth, not in areas where there has been a decline in our traditional industries. For example, in the South-West, female unemployment has increased by 80 per cent. In the South-East, it has increased by 135 per cent. In the West Midlands, I am told by my colleagues that it has increased by 153 per cent.
This country is suffering not from a shortage of work, but from a shortage of jobs. We have people with skills that are not being used. We have resources that are not being used, and we have colossal unmet social need.
How anyone can argue that we cannot pay for investment in industry because unemployment is costing between £12 billion and £13 billion a year is beyond me. We are told that we must have public expenditure cuts and that we must not spend so much money, but while we are doing that public expenditure has soared because we are paying people not to work.
Yet if we consider hospitals, education and the housing problem—in my constituency it is the worst it has been since I became a Member of Parliament and house building is at its lowest for 70 years—there is a demand for those gaps to be filled. The work is there. The contradiction that the Government do not seem to face or understand is that they are paying people not to perform the skills for which they have been trained, and in which money has already been invested, to provide the services to and meet the needs of other people who find themselves in economic, social and cultural decay.
Mine is not an easy answer, but it is one way in which, by investment, by using money constructively rather than destructively, by selecting the industries that we must save and create, by investing in labour intensive areas and recognising that investment in industry will be in capital investment areas so that we must find the balance in social areas and by extra expansion in the public sector, we can begin to redress the balance. Others have done it, but we do not yet seem to have got the message.

Mr. Wickenden: If it were simply a question of diverting resources from unemployment benefit into salaries and giving people jobs, that would be a simple and easy answer and we would build houses. The problem is that when we try to create jobs in the construciton industry or elsewhere the labour content is only 30 per cent. of the total cost. If we are at present spending £30 billion a year on unemployment benefit, it would cost £50 billion a year to employ those people productively.

Miss Lestor: I do not wish to pursue that too much, but one should consider the tremendous loss to Britain in terms of the wealth that would be produced if people were put to work to build houses needed by other people and the saving to the nation if we did not have to put children into care because they are homeless or put people into bed-and-breakfast establishments because there is nowhere for them to live. We must get our sums right. I accept that we must borrow to invest. Every business begins by doing that. However, do not let the Government try to persuade people that we are so impoverished that we must cut public expendture and that there is no money for anything else. That has been the Government's biggest "con". Public expenditure soars while people with skills, who are prepared to meet other people's needs, are paid to be unemployed.
I accept what has been said about the desire for a shorter working week, a shorter working day and the lowering of the retirement age. That has always been among the aspirations of my movement, but that in itself is neither the cause nor the cure of unemployment. The Government, whose contribution to the debate has been pessimistic—they fought an election saying that they would cure unemployment—are presiding over the biggest slide in unemployment that we have seen. The nation will judge them soon on the fact that they are now creating a situation where social unrest is bound to happen because of the misery, desperation and the lack of hope that they have inflicted upon our society.

Mr. Tony Marlow: The fact that 3 million of our people are unemployed is a tragedy. The fact that hundreds of thousands of our young people have nothing positive to do—no sense of purpose, no role and no exciting prospects and, by lacking the stimulation and adventure that young people crave so much, turn instead to riot and misadventure—is an even greater tragedy.
As my right hon. Friend the Secretary of State for Employment so ably said, what has happened during the past few years would have happened whatever Government had been in power. During the world recession, as the most uncompetitive economy where for generations Governments of both complexions have neglected our industrial problems, we have had the recession worst and first.
At last, as we can see from the productivity figures that have recently been released, industry is on the way to a cure and is getting better. However, tragic though the position is, it would be wrong to add unnecessary callousness and insensitivity to it by Opposition Members using such previously unimaginable miseries as a golden vein of propaganda or as an endless ammunition train for sustaining petty party warfare. I do not believe that will


happen. All hon. Members—Opposition and Conservative—are appalled and stirred by what they see. Deep inside we all care.
The Opposition know that we are all in this together. Although we may disagree on certain aspects of philosophy or policy they, like us, know that unemployment is our main priority. Our paramount need is to do something about it. We have some common ground, and I beseech Opposition Members, in the national interest, on those areas of policy on which we can agree, to join us so that we can work together.
I wish to concentrate upon the subject of young people. We are very much in uncharted waters, where the change in circumstances has been so great and the speed of the current so fast that our attitudes, our institutions and our approaches will change. In that new environment we have an immense opportunity and a duty to guide those changes in a radical and virtuous direction. We are not looking for ad hoc solutions or day-to-day palliatives. We are not looking for a calamine lotion with which to swab the spots of urban unrest and rural vandalism. What we wish and need now is a new deal. So dire and dramatic is the vista that has now seared deeply into our national subconsciousness that we shall have the national support and good will to give us the willpower to achieve such a new deal.
Hon. Members will have read, seen or heard about an excellent pamphlet produced last week by an organisation called "Jobs in the Eighties" written by Bob Tyrell. That sets out the challenges and the new conditions that we shall face. We are talking now about jobs in the 1980s, not in the 1960s or 1970s. My hon. Friend the Member for Bridlington (Mr. Townend) made the proper point that we must do something about apprenticeships. However, we must bear in mind that in the 1980s only a quarter of jobs will be in manufacturing industries. We must also bear in mind that in the 1980s and 1990s people will increasingly move from one job to another. That means that they must have not only flexibility so that they can learn the skills with which to go from job to job, but the flexibility of approach.
In the 1980s some people will face the prospect of long periods without jobs. We must train and prepare them, if that happens, to accept it so that they can do something worthwhile with their lives. We must prepare them for the enforced leisure that may come their way so that they may still have a worthwhile, satisfying and active life.
Just as 150 years ago many 12-year-olds expected to spend their adolescent years climbing chimneys or crawling under looms—perhaps the few who did not felt that they were deprived because they were not given the opportunity—so now every 16-year-old has been brought up to believe that he should have a job at 16. Why is that? Is it civilised and right to expect children to start on the conveyor belt of working life at such a young, unformed and uneducated age? How, at that age, can the majority expect to choose a vocation, career or life's activity? What do they know of the world outside? What experience have they had to make a committed choice in such a way that they can pursue an activity or job to satisfaction and effectiveness?
Necessity may be the mother of invention. So what? Sometimes that does no harm. Necessity has now given us the chance to set up a new, structured and varied preparation for our young people.
Those who have read the excellent document produced by "Youth Call" will be aware of the great vista of unmet

and, presently, unmeetable needs of society which young people, properly encouraged. eagerly and challengingly could satisfy.
I am delighted, as are my hon. Friends, to see the Government's new programme—£l, 000 million a year—giving almost unlimited scope to the imaginative development of new and radical approaches. At the moment, young people have a developing range of opportunities. They can go into further education, higher education or apprenticeships. We should not dream of stopping their desire to go into jobs. They will soon be going into the new youth training scheme, but I seek to offer something additional—wider and perhaps more exciting than the range that we have already got.
It would be for those who want adventure and experience before setting out on their working lives.

Mr. George Foulkes: Let them join the Palestine Liberation Organisation.

Mr. Marlow: The scheme will be for those who wish to serve their community and for those who do not yet know what sort of job or activity they want or who cannot locally find what they need. In short, it will be for those who want a training for life—for the 1980s, the 1990s and the new century awaiting them.
Those who have spent time in the Services or who did national service recognise the "educational" benefits of that experience: the chance to grow up in a helpful environment, to meet, mix and travel, assess, to develop self-confidence, self-assurance and initiative. I would not dream of proposing nor would it be sensible to do so that we went back to national service. There is no need, and the circumstances are not appropriate for that. However, I suggest that we set up a pilot scheme for what—for want of a better expression, although I do not much like it—has been called "national community service" to cater for 4, 000 young people.
I should dearly like to give full details about that scheme, but time will not allow because other hon. Members want to speak, but I assure hon. Members that details have been worked out, as have costs, and that the proposal has been discussed with other people. I assure the House that it is workable. In Canada, there is a project called Katmavik, which is going like wild-fire at the moment and is very workable. In short, I suggest a one-year voluntary scheme for young people, not necessarily just for 16-year-olds or those who are unemployed.
Young people would start off for the first three months on a period of preparation, induction and sorting to decide what they are going to do next and getting the necessary training and preparation. They would have three main areas of activity during that period: outdoor work and adventure, vocational training and specific preparation for the remaining nine months.
The remaining nine months could be in three basic areas. I am not saying that we cannot have other areas as the programme develops. We could devise other activities for the young people, but the three basic areas would be community service—we have many excellent community service schemes now—environmental activities—we have many excellent environmental schemes now—and. perhaps, as a recruiting sergeant, some form of cadet service training. I do not mean only military service training. It could be emergency service training or anything of that sort. However, one could propose such a


scheme for the more machismo kids in the city centres—"Come and join us and have some adventure for nine months." They could join the professionals, have some excitement and become men. There would, of course, be suitable courses for women.

Mr. R. C. Mitchell: I am intrigued by this scheme, but is the hon. Gentleman saying that it would be nine months of voluntary service or that the participants should be paid? If they should be paid, who will pay them?

Mr. Marlow: I can reassure the hon. Gentleman that it must be voluntary. There is no way that it could be done through conscription because people would vote with their feet. One cannot throw a manual of military law at 16-year-olds these days. It must be voluntary and something that people want to do. It must be worthwhile and something that will benefit society.
I see the scheme as being a distinct part of the new Manpower Services Commission scheme, which will cost some £55 per person a week. We would provide the instructors, accommodation, food, clothing and pocket money within the scheme. Within the money that the scheme is providing, we could provide something more exciting and more wide-ranging than we now have. It would be part of the 300, 000 places that the Government are now setting up. We are not seeking additional funds. We shall get a great deal of support and sustenance from industry. We should be looking to industry to give us a degree of sponsorship. On top of that, we should ask industry to let us have some of its young managers to join our scheme at the lower levels of management as part of their training as managers.
I shall add some of the principles involved. The cost would be less or no more than other schemes. Hopefully, it would be residential throughout, and within, but a distinct part of, the youth training scheme that my right hon. Friend projected. I know that it will have the support of industry. It will also have a great element of self-sufficiency.
Other aspects we could go for would be a degree of horticulture and agriculture. Children from city centres could set up small farms and some of the food and products they grow could be fed back into the scheme. Accommodation, for example, in the inner city areas could be provided by those on the scheme. We could take over an abandoned terrace and make it habitable for our own use.
Another basic principle of the scheme would be that activity within the community and local areas would largely be done on an agency basis. We would set up the induction training, but the field activity would be done by voluntary organisations and the local authorities now doing it. We should be able to say to them that we have people who have been together for three months with skills available to do jobs and ask them if they want them. I am sure that they would come running to us.
There are many other excellent schemes that I fully support and admire. This scheme is different and, in many ways, more challenging. It provides something that others do not. Like the well-known advertisement, it reaches the parts that other schemes do not yet reach. As anyone who has experience will know, it offers the value of a sustained residential experience. There would be a great deal of

group activity and people would realise that they were responsible for others within the group. That would help to build loyalty, responsibility and esprit de corps. We would include vocational training. We would help to develop in young people a positive attitude towards the community in which they will grow up, live and work. Most importantly, we would also develop a sense of self-dependence and initiative so that, whatever job the young went for and whatever their circumstances, they would make the best of them.
Many people say that people should look upon their problems as opportunities. The sad circumstances in which we find ourselves and the difficulties in which our young people are placed are an opportunity. I am sure that the Government will grasp that opportunity with both hands.

Mr. Stan Thorne: As you probably know, Mr. Deputy Speaker, since the beginning of the debate Conservative Members have spoken for 142 minutes and Opposition Members have spoken for 99 minutes. On a simple mathematical calculation, I could quite reasonably speak for 43 minutes and balance the account. I do not propose to do so, because I am sure that other Opposition Members would like to speak, but, given that the next speaker will be a Conservative Member, it is doubtful whether they will be able to.
In January 1982, in the Preston travel-to-work area there are, in cold figures, 18, 393 unemployed people, and that is equivalent to 12·4 per cent. of the employee population. In January 1979 the figures were 7, 751 or 5·3 per cent. of the employee population. In two and a half years of Tory rule, economic lunacy and total disregard for humanity—as the figures reflect—there has been an increase in unemployment of 137 per cent. in my area. If British Leyland has its way, a further 1, 800 redundancies will affect my area.
The Secretary of State says that everything is the fault of the recession, forces beyond our control, and so on. As briefly as possible I shall deal with some of the causes of the problem, and I shall refer specifically to Leyland Vehicles. As hon. Members will know, about 8, 000 workers are on strike at Leyland Vehicles. The strike began last Thursday and stems from the management's refusal to negotiate with the trade unions about a plan that the trade unions had produced, which refers to productivity and jobs.
Of course, the plan conflicts with Sir Michael Edwardes' corporate plan. If the management believes that the corporate plan is too strong to be questioned, that demonstrates the management's weakness, because it is not even prepared to consider the trade union plan. Unfortunately, it also illustrates what passes for industrial relations in the empire that Sir Michael Edwardes rules over. What are the trade union suggestions?

Mr. Dickens: On a point of order, Mr. Deputy Speaker. The debate concerns employment, yet we have heard nothing other than a speech about an internal dispute at British Leyland. I think that that is quite out of order.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): The hon. Gentleman may think that, but each hon. Member must be responsible for how he interprets his speech.

Mr. Thorne: It is an appalling suggestion, but understandable, considering whence it came. The hon.


Gentleman clearly does not read much and does not know that a plant that had 9, 000 workers only a few months ago now has only about 5, 000. If that fact is not relevant to employment, I do not know what is.
When I was rudely interrupted, I was about to give some of the trade union suggestions. They say that Leyland Vehicles must retain its manufacturing capacity. Eight out of 10 jobs at Leyland are in component manufacture. The key components threatened with outsourcing are engines and gearboxes. Five of the seven United Kingdom truck manufacturers are owned by United States companies. Only Leyland Vehicles and the much smaller ERF are in United Kingdom ownership. If the United Kingdom is to remain in international truck manufacturing, Leyland Vehicles must continue to design and manufacture its engines and other key components. That factor is relevant to employment. However, management plans are moving towards handing over control to United States multinationals—Cummins for engines and International Harvester—yet the Government have the temerity to talk of British competitiveness. What irony!
Out-sourcing is detrimental to our balance of trade. The International Harvester DT466 engine which Leyland Vehicles is planning to buy will be built in the United States and shortly in Spain. That is tantamount to exporting jobs. The Cummins engines supplied to Leyland Vehicles are likely to come from Cummins' United States factory, with only "screwdriver assembly" in the United Kingdom. The increase in imports will make the management of our economy that much more difficult.
Management's phasing out of in-house component manufacture will be irreversible. The design teams, the particular work force and the skills entailed in the present production team will be dissipated and Leyland Vehicles will fall into a permanent state of dependence on other—mostly foreign—engine manufacturers. The trade unions at Leyland therefore demand that the Leyland Vehicles management and the Government maintain and extend the in-house manufacture of major components at Leyland Vehicles, which would obviate the need for the present round of redundancies which the management is seeking to promote.
If Leyland is to remain an engine manufacturer it requires a new foundry, which will cost about £30 million. The new trend is towards lighter alloy engines, made from thin-walled castings. Leyland Vehicles has the expertise for the new technology and has, indeed, produced prototype engines, but for mass production a new foundry is essential.
Investment is long overdue in machine tools. Machines are still being used at Leyland stamped "WD". In the past four years only a derisory £2½ million has been spent on new machine tools at Leyland Vehicles, with the bulk of investment money going to the new assembly plant, the technical centre and in parts.
Leyland Vehicles management did not carry out the programme of renewal of worn out and outmoded equipment envisaged in the 1975 Ryder plan. Had it done so, British Leyland might be in a much more realistic competitive position. At Leyland there is an increasing demand for investment in a new foundry and in machine tools. The Government have a responsibility to ensure that that investment is provided if we are to maintain a truck manufacturing interest of any value in the United Kingdom.
The Leyland Vehicles management policy of cutting back investment is in direct contrast to the expansion of Cummins, the American engine manufacturer. Despite a loss of $6 million last year, Cummins has launched a massive investment programme amounting to 150 mill ion per year in new plant and engines for the big upswing in demand that it expects in the mid to late 1980s. The company is backed by money from the giant oil company Teneco Incorporated. What can be done and should be done by the Government, given our North Sea oil revenues, to provide investment in British manufacturing rather than to promote imports from the United States of Cummins engines?
There are one or two problems with regard to outsourcing. Some things that have happened have disturbed the trade unions at British Leyland. Selling off has much to do with the present position at British Leyland. We all remember Kenaton. Leyland Vehicles' pattern making shop was closed and some of its machinery was sold to Kenaton Engineering, a company owned by a senior member of Leyland Vehicles management. Kenaton now makes patterns for Leyland Vehicles.
In 1981 the British Leyland subsidiary, Prestcold, was sold to a private company, Suter Electrical, of which the chairman and chief executive is David Abell, who was formerly manager at Leyland Vehicles. Before that he was in charge of Prestcold. It is curious that the person who bought Prestcold is the same person who, on leaving it in April 1979, publicly admitted in the Financial Times of 11 April that
he must take the responsibility for their present financial near-collapse.
It was that profit squeeze that decided British Leyland to sell Prestcold. I only hope that the Comptroller and Auditor General will examine closely some of the financial arrangements involved in selling not only Prestcold, but Kenaton.

Mr. Tam Dalyell: I should like to make the point, particularly in the presence of the Secretary of State for Industry, that when, on 30 November, I made a long speech at the Public Accounts Committee debate on related topics, and subsequently on 1 December went to see Mr. Gordon Dawney, the Comptroller and Auditor General, at Audit House, I hoped that there would be a report in a few weeks. Some of us believe that the Comptroller and Auditor General, who I understand is working hard, has a difficult task. Had it been clear-cut, surely he would have had the report by now.

Mr. Thorne: Like my hon. Friend, I am perturbed about the situation. There have been various reports, some in the financial press and some in The Times and The Guardian, which raise curious issues, particularly in regard to the selling of Prestcold.
My hon. Friend will also be aware of the Bathgate tractor situation. About half the investment at Bathgate has gone into the new tractor range. Now that it has been designed, developed and proven, it is being sold off. British Leyland refuses to disclose the price. A key figure in the negotiations has been Mr. Jack Smart, the former deputy managing director of Leyland Vehicles.

Mr. Arthur Lewis: Has my hon. Friend notified the Secretary of State for Trade of the point that he is making which is that the Auditor General may be busy? Will the Secretary of State for Trade listen, or will he say that he


will have an investigation made because this is taxpayers' money? Will he give an assurance that he will have the matter investigated?

Mr. Thorne: I am sure that the Secretary of State is familiar with the situation. What he is probably hesitant about, and what the House ought to demand, is a public inquiry into all the selling off that has taken place at British Leyland.
I am anxious to let others speak in the debate. A relevant factor in the employment situation is the action of the Secretary of State for the Environment in regard to the block grant and its impact on the ability of local authorities to purchase new fleets of buses. That has affected the production of buses at British Leyland. We are also anxious to promote the sale of buses in Third world countries. Why management considers that the elaborate and sophisticated Olympian bus is the sort of thing we can take into Third world countries I have no idea.
I could deal with some other aspects of the trade union report which the management is still reluctant to discuss. The worsening employment situation in the North-West demands that the plan that the trade unions have prepared should receive urgent and full consideration not only by those involved in the industry but by the Department of Industry. The Department of Employment should use its influence to ensure that that is done, in order to guarantee jobs at Leyland and the long-term future of this part of our manufacturing base, without which in the late 1980s and early 1990s we will have even higher unemployment figures.

Mr. Raymond Whitney: The hon. Member for Preston, South (Mr. Thorne) has done the House a service by dwelling in detail on the problems of British Leyland and in particular on the present dispute. Nothing else points up more clearly the problems and the causes of the unemployment with which we are trying to deal in the debate.
The hon. Member may have been listening to the "Today" programme on Radio 4 this morning when a speaker from the trade union side in that dispute was making the sort of case that he has made tonight. In another item shortly afterwards a representative of Opel motors was telling listeners that the great benefit of selling in this country was that all other manufacturers of motor cars around the world could sell at 40 per cent. above prices obtaining elsewhere precisely because we have been landed with a price structure that is related to British Leyland, despite the fact that hundreds or, indeed, billions of pounds of British taxpayers' money have been put into it. That is precisely the problem that we must recognise and deal with.
If Opposition hon. Members would stop their understandable political hysterics and recognise the realities, we should have a much more fruitful debate. They should acknowledge that our problems are suffered by the whole industrialised world, and in particular the older industrial world—the Western European nations. Their rates of unemployment are climbing fast and coming very much into line with ours. When we consider the effect in Germany, for example, of the loss of guest workers we can see clearly that they are not immune from the problems that we face.
Moreover, we should accept that the percentage of our population in civil employment is higher than anywhere else in Western Europe, with the single exception of Denmark. We suffer from the problems of hardening of the industrial arteries. We have old-style industries, long-based industries and a population with a high standard of living and high expectations. There are many restrictions in our society, where there have been, and are, more problems than anywhere else. We know all of those problems. In particular, our real distinction is the range of blockages to high productivity, to which, sadly, our antiquated union structure has contributed.
Western Europe as a whole is now under fierce pressure from the newly industrialised countries. We all know about the pressure of Japan, but it will not stop with Japan. There are Korea, Hong Kong, Taiwan, Singapore and all the rest. The countries of Western Europe that survive will be those that show flexibility and a readiness to adapt to the challenge.
We at last have a chance to break out of the vicious circle into the much talked about virtuous circle. The vicious circle that we have been locked into is poor productivity, high prices, inevitably low sales and low profitability—therefore low investment and, therefore, loss of jobs. We all know that position too well. Now we have begun to move in the other direction.
We have heard about increases in productivity. Over the past 12 months our unit labour costs have increased by only 2 per cent.—lower even than in Japan. That is a marvellous start. According to a recent estimate, our manufacturing competitiveness improved between 1978 and 1981 by 10 to 15 per cent., taking into account the improvements in unit labour costs and the recent falling pound. That is going in the right direction.
The move having been started, that is the way to go, if we have the courage to hold on to what has been achieved. It is the way to create profitable industries, to lift our incredible average rate of return of 2 per cent. There can be no sensible investment at that level, but if we can hold on to the increase in productivity there will be investment and then more jobs. That must be the only way forward.
Another sign of hope is to be found in the improvement in the savings ratio. An interesting article in The Economist in December, entitled
Hands off next year's recovery",
said that savings ratios, which had been so high, showed signs of falling, and one way of making sure that the fall was checked would be to indulge in another orgy of reflation, or further inflation, with all that that would do to interest rates, and indeed to the level of the pound, and what that would do to inflation. If that happens it has been shown again and again throughout history that the savings ratio goes up because people, understandably, become scared. However, if they come to understand that inflation is being held in check, every experience gives reason to hope that that savings ratio will fall and demand will be put into the economy. The Economist says:
This potential for extra spending exceeds anything that a giveaway budget would achieve.
That is a lesson that giveaway Budgets cannot create genuine growth.
The figures show that we already have the opportunity in the demand we still have in the economy. It is easy to forget, in the doom and gloom that we often hear in the media and inevitably in our debates, that our imports


increased by 14 per cent. in 1981. That must not be forgotten, although our balance of trade is marvellous. That 14 per cent. represents a challenge to British industry and to the sort of people referred to by my hon. Friend the Member for Dorking (Mr. Wickenden) in his splendid speech, which was based on deep experience of industry. He pointed out that all those small industries can look for their markets from the imports and that is where their challenge and opportunities lie.
The ultimate essential is that we do not do what has happened four, five or six times in the economy under Governments of both complexions since the war. We have embarked on a policy of common sense; not one of crazy monetarism but one recognised by Governments all over the world. The Government have followed sensible fiscal policy, but each time that we came within a measure of success, just as the lift-off was coming, Governments lost their nerve. That has led to an injection of funny money or the creation of paper money put into the economy at a time when the economy was generating demand. The country has gone straight back into the whirlpool of inflation.
When my right hon. Friends are taking important decisions tomorrow I beg them to recognise the lessons of the past, to understand fully the signs, that the only genuine jobs can come from the private sector, and to take full account of the fact that, as the Treasury's statistics have shown, since 1971 the return on investment in the public sector has never been significantly above zero.
Already built into the Government's spending plans is a major increase in public sector spending. The burden must be removed from the private sector and it must be given every opportunity. It will respond—the market and the demand are there and we still have the talent. What we now need is the courage to stick to the Government's convictions. I hope that they will recognise this.
I hope too that the Government recognise what they have achieved so far and that if they turn away now the sacrifices that have been extracted from the private, non-guarded sector will have been in vain. If they do that, the country will not forgive them. If they hold their nerve the country will recognise their courage and jobs will return in the only sensible way they can—through being genuine jobs, created by real demand, of which there is plenty.

Dr. David Clark: I share the deep concern over the 3 million people without work throughout Britain. As the representative of a constituency with over 26 per cent. male unemployment in a region—the Northern region—that traditionally has, and continues to have, more unemployment than any other part of Britain, I find it strange that a Northern voice has not been heard today. It would be an insult to the 222, 000 unemployed people in the North if I attempted, in one minute today, to put their case.

9 pm

Mr. Stanley Orme: This major debate, part of a two-day debate on unemployment and the economy, takes place against the background of 3 million unemployed and the need to create another 5 million jobs by the mid-1980s. That is the size of the problem facing Britain and our economy. The opening speech of the Secretary of State for Employment was a disgrace. The right hon. Gentleman did not face the problem. Nor did

he give any real answers about how the Government intended to tackle it. Even some of his hon. Friends were critical of the Government's policy, or lack of policy.
Reference has been made to the special Cabinet meeting—a crisis meeting as it was called—that is to take place tomorrow morning. It is not a special Cabinet meeting. It is the normal Cabinet meeting at which there will possibly be a short debate lasting about an hour. That will not be sufficient to discuss the problem and all that needs to be done.
The Opposition recognise that there have been problems in British industry over a number of years. The Labour Government took measures through the National Enterprise Board and other agencies to create employment. When we left office, unemployment was coming down. However, in the metal manufacturing industries, there has been a 28 per cent. fall in employment during the last two years. A total of 1·25 million jobs directly related to the manufacturing sector have been lost. That is a tremendous increase. With a reduced manufacturing sector, the job becomes more difficult than ever.
There must be another way. Critics of the Government's policy can be found far beyond the Labour Party and the trade union movement. They include Conservative Members, members of the Cabinet, the CBI and parts of the City. The Labour Party believes that tinkering with the problem cannot achieve the major changes that are required. We believe that a fundamental change must take place in our economy and in industry. That is why the Labour Party is putting forward an alternative strategy. That is why we have linked the debate to Labour's "Plan for Expansion". We say that there is a Socialist alternative. I wish to spell out some of the main factors of that alternative.
A drastic increase in public expenditure directed to creating jobs must be a first major priority. There are areas that cry out for such investment—the construction industry dealing with new housing and inner cities, railways electrification, investment in telecommunication, replacement of the nineteenth century sewerage system in many major industrial cities, new power station capacity, road maintenance and construction, and the provision of the gas pipeline.

Mr. Arthur Lewis: Will my right hon. Friend add to his list that thousands of hotel and catering workers from foreign countries are allowed to work in Britain, but 116, 464 British catering workers are unemployed? How crazy can we get? There is high unemployment in the industry, yet we allow workers to come in from foreign countries.

Mr. Orme: I hope that my hon. Friend will allow me to develop our strategy. I believe that we can create jobs for residents of the United Kingdom.
The Government, through the National Enterprise Board, could invest in coal, oil and gas extraction, biotechnology, mining equipment, heating, ventilation, air conditioning, refrigeration equipment, solid fuel technology, electronics, scientific instruments and energy savings. They are only a few of the areas in which there could be investment.
Investment in the public sector overflows into the private sector and creates jobs in both the private and public sectors. To make that investment the borrowing requirement must be increased. We face that squarely.


Against that, one must set increased employment, increased savings and a reduction in payments of unemployment benefit, as my right hon. Friend the Member for Chesterfield (Mr. Varley) said earlier.
The PSBR might rise for a time, but, in the long term, growth in the economy will cause a return flow of money into the Exchequer. That will increase resources which can be allocated to benefit the whole community. The nation would be borrowing to finance productive investment instead of borrowing to finance increased unemployment, as is happening now. We accept that there would be a need to borrow and that the PSBR would be increased.
A pamphlet produced this month by the CBI asks in a heading
How can it be done?".
The answer in the pamphlet is "By higher Government borrowing". That is what the CBI says today. If we were in a position to implement such policies, it would be seen how we could put that increased borrowing into effect.

The Secretary of State for Industry (Mr. Patrick Jenkin): The right hon. Gentleman has given an astonishing list of projects ranging through industry for public investment. He must tell the House how much the Labour Party wishes to see invested hi such projects, how much extra borrowing would be necessary and how much higher interest rates would have to be to finance such investment.

Mr. Orme: In my opinion, a minimum of about £8 billion or £9 billion would have to be put immediately into the economy. That is based on the TUC's annual report for this year. That report gives the figures and the facts. Such investment would lead to increased borrowing. It would be an investment to borrow. It would not be detrimental to the economy. I am sure that my right hon. and hon. Friends support that.
Conservative Members often ask what effect there would be on inflation. Measures could be taken. One would be to cut VAT, which has had a dramatic effect on inflation. Action could be taken on interest rates. There could be a relaxation in nationalised industries' external borrowing limits and in the employers' national insurance surcharge. We now spend more on unemployment benefit than on the National Health Service and something must be drastically wrong. A great deal of discussion—not least from the Government Benches—has dealt with overmanning and productivity. Productivity is one of the key areas that must be tackled by a Labour Government.
Planning and industrial democracy are urged by the Labour Party. Over recent years, British industry has suffered from lack of investment and low productivity. Despite the intrinsic wealth that Britain possesses from resources of North Sea oil, gas and coal, the crisis affecting the advanced countries of the world is worse in the United Kingdom than in any of our main competitor countries. Therefore, a policy of direct Government intervention in industry through planning is crucial.
That intervention can come through sector working parties, the Manpower Services Commission, a strengthened National Enterprise Board dealing especially with research and development—which is an area that has been greatly neglected and that the Government have played a part in running down—and the setting up of a

planning commission to examine overall strategy. By those means a policy on which to base growth in our economy could be achieved.
We must look at some of our competitors. France has a Minister responsible for planning. The Japanese have created a planning organisation. These are both indications of Government intervention. The difference between Britain and its main competitors is that the competitors intervene directly in many ways into industry while our Government have washed their hands of industry. It is worth examining the type of intervention that has taken place in Japan and the effect that this has had on its economy and the world economy.
In the 1960s, capital intensive products such as steel, motor cycles and ships were priorities within the Japanese economy. By the mid-1970s, more complex products such as cars and colour televisions dominated the Japanese industrial strategy. For the 1980s, knowledge intensive industries such as computers, special chemicals, robotics, machine tools, telecommunications and energy-saving equipment have been identified as priorities. Many of the ideas that were developed in the United Kingdom are now being exploited elsewhere. We need a policy of intervention in the economy.
When we refer to planning, we are talking about both management and workers who produce, design and instigate. We hope that it will be possible for workers to participate in the decision-making machinery, because if productivity is to increase such co-operation is essential.
There is also a clear and long standing case for strengthening the rights, the status and influence of workers and their unions in the work place as part of the process of extending democracy throughout society. The measures that the Secretary of State plans to introduce in his trade union Bill will have an adverse effect on such developments. Instead of achieving the co-operation of work people in industry, the Secretary of State will bring about hostility and consequential problems. The problems of overmanning and productivity will be pushed to one side and will not be discussed.
Therefore, we believe that it would be possible to negotiate development contracts in major areas of the economy, including the multinationals.
What are the Secretary of State's views on the Davignon proposals on disclosure of information by the multinationals now situated throughout Western Europe? That disclosure of information is important, but the Opposition feel that it should go beyond that, into investment prospects and that the Davignon proposals are not sufficient in that respect. We believe that it would be in the interest of many major companies in our economy, in both the public and the private sectors, to have such agreement and to be able to arrive at such understanding.

Sir William Clark: What does that mean?

Mr. Orme: It means that if one has a planning agreement one can look at investment, forward planning and projects and the work people who will be asked to produce the products will be taken into consultation and will play a part in decision making. That sort of action is long overdue.
The need for long term investment is obvious. The Opposition believe that this should be achieved through the use of North Sea oil revenues and other forms of


investment. As my right hon. Friend the Member for Chesterfield said, £13 billion or £14 billion are being wasted. That is the cost to the economy of unemployment or social security benefit and the loss of tax and savings. It all adds up to a tremendous drain on the economy at a time when that money should be invested in it.
The abolition of exchange controls, of which there has been little public notice, is of major importance. The abolition of controls and the subsequent outflow of money for investment abroad instead of in Britain is a disgrace. That money could have helped industry in the form of research and development and investment at a time when it is greatly needed. As the Secretary of State knows, more than £5 billion has left the country since the abolition of exchange controls. We regard that outflow of money as a factor of major importance. [Interruption.] I thought that hon. Members were listening. I am explaining the proposals that the Labour Party is now discussing throughout the country and that we are putting forward as our policy. Conservative Members often ask "What is your policy? What are you doing?" We now have a policy of "plan for jobs"—an overall collective policy that we intend to put into operation at the earliest opportunity.
If the economy achieves growth and gets back to prosperity in any shape or form, there will be a danger of sucking imports into the United Kingdom. If we are to implement a sensible trade policy, there must be planning for trade with a properly negotated policy on import ceilings and quotas with our main trade partners. Many of our competitors—for example, the EEC, Japan and the United States—now operate various forms of import controls against British goods. There have been complaints from Conservative Members and continous complaints from Opposition Members about British goods being excluded from foreign markets. We should be able to discuss the matter on a sensible basis. That does not mean that we would not allow imports, but they could be controlled by quotas and ceilings. We can also plan for import substitution and help to produce goods within the United Kingdom from which I am convinced our economy can benefit. Our objective is to secure a growth in imports consistent with balance of payments stability.
We have seen what the Government have done. We have seen their attitude to public ownership. They have given away some of the most profitable public sectors of our economy. The word they use is "privatisation", but the real word is "denationalisation". Those sectors have been disposed of at give-away prices. That action has affected some of the most central parts of our economy.
Recently I saw a newspaper report that the Secretary of State and the Government were keen to make a major inroad into telecommunications. In the steel industry debate the other night, we heard that they wanted to privatise steel. Tens of millions of pounds of public money have been put into these industries and they are to be handed away.

Mr. Marlow: What nationalised industries have the Government given away? What has been sold has been sold at the market price.

Mr. Orme: The BNOC comes to mind, as does British Aerospace. The Government want to get rid of parts of British Leyland and the steel industry. They want to get rid of sections of the telecommunications industry. The list is considerable. Perhaps the Secretary of State will give

that list to the House. It is a policy of giving away assets which belong to Britain and which have been paid for by British money. I want to make it clear that the next Labour Government will renationalise those assets at the earliest opportunity.
We have been talking about public ownership and its success. A future Labour Government will extend public ownership in key sectors of the economy, not least in the areas where new industries, such as microelectronics and high technology, will have to be created. This is where public money can go, where investment can take place and where we can give a positive lead to industry. A Labour Government, not a Tory Government, created Inmos. That should be firmly taken on board.
I come now to the employment not least of young people leaving school and of women. Those two sections have suffered drastically. The training measures that the Secretary of State has introduced are inadequate. Much more needs to be done. We need to train for skill. If we get an upturn in the economy, as I think the Secretary of State would agree, we would be short of skilled workers. Nevertheless, his Department has closed 17 training centres. We shall have to reopen training centres arid provide training for skill.

Mr. Tebbit: Is the right hon. Gentleman referring to training boards or training centres? The training boards were doing no training. That is why they were closed.

Mr. Orme: That will not wash at all. We must train young people between the ages of 16 and 19. We must also face the fact that many school leavers will have had no training at all by the time they reach their twenties. The trade union movement will have to face the fact that m many instances people will enter industry when they are older simply because of the problems that the Government have created. I have no doubt that the trade union movement will accept its responsibility.
I represent part of the city of Salford, which has seen a 44 per cent. staff cut in a university that was training for skill. The Prime Minister went there the other day and told the Vice-Chancellor "John, you are doing very well. I hope you will succeed". The staff in that university have been reduced by almost half. Industry and the trade unions in the area have amalgamated to oppose the policy, but everyone over the age of fifty, irrespective of ability—be they manual workers or academic staff—will have to go by March.

Mr. John Grant: The Secretary of State dodged the chronic problem of the hardcore, long-term adult unemployed, of which there will be more than 1 million before the end of the year. All that the right hon. Gentleman could offer was 30, 000 places on the community enterprise programme. Is that not scandalous?

Mr. Orme: When I left: the DHSS, the long-term unemployed totalled 300, 000. It is now 1 million. Drastic measures will have to be taken to overcome the Government's attitude.
Some Conservative Members have treated with levity the measures that I have put forward. We have outlined a constructive package of proposals that will create jobs within the economy and reverse the type of policies that the Secretary of State and the Government are pursuing. The right hon. Gentleman must have heard his hon. Friend the Member for Rutland and Stamford (Mr. Lewis) make


it plain that if the Tory Party does not act on this issue it will again become known as the party of unemployment. The electorate will judge the Government at the appropriate time, and we shall then be able to undo some of the tremendous damage that they have done to the economy.
I was trained in the private sector of manufacturing industry. As I travel the country, I now see efficient firms forced to the wall because they find it impossible to maintain production and employment.
The Government's policies have failed. An hour's discussion at a Cabinet meeting tomorrow morning will not resolve these problems. It is time that these issues were taken to the electorate so that the people can judge. If they were, we firmly believe that we would see the return of a Labour Government.

The Secretary of State for Industry (Mr. Patrick Jenkin): We have been warned. The right hon. Member for Salford, West (Mr. Orme) has spelt out with horrifying clarity the madcap ideas upon which his party seems to be bent. It will never have an opportunity to put all those horrors into action. The only thing that he did not spell out was how long it would be before the IMF was called in. Last time it was two years. If he goes on with policies of the sort that he has outlined to the House it will be two months, not two years.
It would be difficult to imagine a more grossly irresponsible approach to the management of our economy. If the right hon. Gentleman still harbours the illusion that that sort of policy mix will solve anything at all, it is a triumph of hope over experience. The right hon. Gentleman has suffered from a degree of amnesia about what happened when his Government tried to carry out some of those policies. I find it rather depressing that he has learnt so little.
Until the right hon. Gentleman spoke the debate was characterised by a profound concern on both sides about the level of unemployment. There was an acknowledgment—not, I might say, by the right hon. Member for Salford, West, but by many speakers on both sides—of some of the causes of the high unemployment that we face: the successive oil price shocks, which affected not only us but the whole consuming world, and the effect of the world recession. There was agreement on both sides—I do not know whether the right hon. Gentleman agrees—that there are no simple solutions.
There was an interesting contrast between the right hon. Gentleman's speech and that of his right hon. Friend the Member for Chesterfield (Mr. Varley), in that the right hon. Member for Chesterfield did not mention Labour's "Plan for Expansion". He opened the debate, yet he said nothing about it even though it is mentioned in the amendment that he moved.
I did not hear the speech of my hon. Friend the Member for Dorking (Mr. Wickenden), but I gather that it was of very high quality. He put forward the simple proposition on which the Government's policy is based: that the way to more secure and better-paid jobs depends upon industry becoming more competitive.
My hon. Friend the Member for Aberdeenshire, West (Sir R. Fairgrieve) referred to the flood of imports of consumer goods that fill our shops and showrooms—cars

from Germany, refrigerators from Italy, and television sets from Japan. The list is endless. We have lost customers to the competition.
When we discuss unemployment we should remember that Governments do not create jobs. Not even employers create jobs. It is the customers who provide jobs. Despite all the talk about whether this or that policy will cut unemployment, the acid test is whether, as a result, industry will become more competitive and find more customers. Both the right hon. Member for Salford, West and his right hon. Friend completely ignored the fact that in the disastrous period at the end of their last period of Government the effect of the overspill from Clegg and the post-dated cheques was felt and this country lost about 50 per cent. of its competitiveness—[Interruption.] That was the case in 1978. When I say "competitiveness", I mean in real terms and not phoney price competitiveness because of the depreciation of the pound.

Mr. Shore: The Secretary of State has made either a serious or a frivolous point. Will he tell us what the exchange rate for the pound was in May 1979 and what it became 12 months later, because that decisively influenced the competitiveness of British goods in export markets?

Mr. Jenkin: The right hon. Gentleman is trying to duck the responsibility of his Government—the massive pay explosion that surrounded the events at the end of 1978. The right hon. Gentleman knows that the explosion in private sector wage costs and the explosion that followed the Clegg report were the direct responsibility of his Government. He left us the post-dated cheque.
Customers provide the jobs and pay wages. A nation that cannot keep its customers is unable to earn its living, and a nation that cannot earn its living cannot keep its people in jobs. Our present unacceptably high unemployment is a direct reflection of our ability as a nation to earn our living. The House will be depressingly familiar with the phenomenon that we have seen during the past 30 years or more—with each downturn in the economy, unemployment has risen higher than in the previous downturn. The process is accelerating. During the recession over which the Labour Party presided it doubled, and during this recession it has doubled again. Steadily, and inexorably, British industry was becoming less and less competitive.

Mr. Michael Foot: Rubbish.

Mr. Jenkin: The right hon. Gentleman says "rubbish", but it is true. It has been recognised in this debate by some wise speeches from hon. Members on both sides of the House.
I come now to the thoughtful speech of the hon. Member for Glasgow, Maryhill (Mr. Craigen), during which he said—I hope that I quote him correctly—
No way will we see the resuscitation of the manufacturing base in Britain".
I do not accept that for one moment. We are and will remain, as far as ahead as can be seen, an industrial country. I do not accept or even understand what people mean when they talk about a post-industrial society.

Mr. Craigen: Will the Secretary of State explain why the proportion of people working in manufacturing industry has gone down from 31 per cent. of the working population to 28.5 per cent. during the lifetime of the Government?

Mr. Jenkin: That has happened because we have lost business to competitors. A jibe that has been made again and again by trade union leaders is that the British worker spends Monday to Friday making British goods and Saturday buying foreign goods. That is why we have lost jobs.
For the foreseeable future—I agree with my hon. Friend the Member for Rutland and Stamford that it includes service industries as wel1 as manufacturing—industry will be the main source of jobs for our people and wealth for Britain. Upon the success of industry will depend our ability to raise the standard of living, increase pensions, improve the National Health Service and do all the things that all hon. Members wish to do. Above all, our success in the manufacturing and service industries will provide jobs for our people.
The message that I can bring to the House is that after the long years of decline the long haul back has begun. The British disease is beginning to yield to treatment because we are treating not just the symptoms but the causes; overmanning. restrictive practices, outdated production methods, poor industrial relations, weak management and pay rising far faster than output—the familiar litany of shortcomings that we know so well. That is beginning to change right through industry.
Firms have made themselves more efficient. Manufacturing productivity has improved. Overmanning has been cut. Restrictive practices have been abandoned. Pay settlements have been at a far more reasonable level and days lost through strikes have become fewer and fewer. Managers are once again managing. The result is that we are now winning hack customers. Manufacturing output in the third quarter of last year rose 2½ per cent. and in the three months to November was a further 1 per cent. higher.
Productivity, measured as output per head, rose by no less than 10 per cent. between the end of 1980 and the third quarter of 1981. Some hon. Members have suggested that higher productivity must inevitably mean more unemployment, but the right hon. Member for Chesterfield knows perfectly well what he said when he occupied my job and when he addressed the British Council of Productivity Associations in April 1978. His words are significant when we consider the country today. He said:
Whatever the short-term implications of improving productivity, we must realise that without it our industry's competitiveness will drop further and further behind our rivals.
I call the right hon. Gentleman's attention to the short-term implications. Whatever he meant, he recognised that in the short term it meant higher unemployment. He knew and recognised that, and he was frank about it when talking to the association.
I shall quote some figures relating to unit labour costs which are the most remarkable indicator of what happened in the past 18 months. I hope that I have the attention of the House. The figures are for wages and salaries per unit of output in manufacturing industry. Unit labour costs, 18 months ago, were running 25 per cent. higher than a year earlier—a far faster rise than in any other major industrial country. This relates to internal unit labour costs and is nothing to do with the exchange rate.
In the first quarter of 1981 the figure fell to 16 per cent., in the second quarter to 8 per cent. and by the third quarter it was only 5 per cent. The latest figure is now only—[Interruption.]

Mr. Speaker: Order.

Mr. Jenkin: The latest figure for unit labour costs is now only 2 per cent. higher than it was a year earlier. To move from a 25 per cent. increase to 2 per cent. increase in 18 months is, by any standards, a remarkable performance.

Mr. Jack Straw: rose

Mr. Jenkin: No.

Mr. Straw: rose—

Mr. Speaker: Order. It must be clear that the Secretary of State is not giving way. Therefore, he must be allowed to continue.

Mr. Jenkin: It is even more significant that the improvement is far more striking than in any other advanced industrial country. We are now beginning to beat the competition. No other major industrial country comes anywhere near our rate of improvement in unit labour costs. That augurs extremely well for the future.
We are now well placed to increase our market share; in other words, to win customers who provide jobs and pay the wages. Of course we still have some way to go, because we have not recovered the 50 per cent. of competitiveness lost between 1978 and 1980. We cannot let up. The improvements must be held and built on. That is why the battle against inflation is vital. It is not a question of either more jobs or lower inflation. Lower inflation makes us more competitive and that brings us more customers and, in turn, more jobs.
My hon. Friend the Member for Rutland and Stamford drew a distinction between making the country more efficient and providing more jobs. He expressed a worry—often held—that new technology will inevitably lead to fewer jobs. That fear has hampered progress down the centuries. I shall reassure him by quoting from an authoritative report by the Advisory Council for Applied Research and Development. It said that:
more unemployment results from loss of market share following a failure to innovate than from the introduction of new technology. Conversely, if new technology leads to an increase in market share, there is generally an increase in employment opportunities.
The House should accept that important and authoritative statement from a very high-powered council, which has served Governments of both parties well.
Japan has been cited. The rate of unemployment there is very low, because the Japanese have innovated and won markets. That is why we have taken specific measures to encourage the spread of new technology, to promote innovation and competitiveness and to make our economy more responsive and adaptable.

Mrs Shirley Williams: rose—

Mr. Jenkin: I shall turn to the points raised by the right hon. Lady in a moment.
We have maintained and expanded the product and process development scheme and introduced schemes to accelerate the spread of modern microprocessor technology. Under the microprocessor applications project, £55 million has been allocated to make industry more aware of that enormously important revolution and to help with investment schemes. In addition, £55 million has been allocated to the microelectronics support scheme to help the industry develop its products.
Schemes in other countries were mentioned, but there was a notable forgetfulness about mentioning schemes in this country. There are schemes to support the


development of fibre optics, of robot machine tools and integrated robot systems—[HON. MEMBERS: "They are on the Conservative Benches."] Opposition Members may have their joke, but these matters are important. We have renewed, for four years, the manufacturing advisory service. My right hon. Friend the Prime Minister has designated 1982 Information Technology Year—[Interruption.] The Leader of the Opposition is foolish to scoff. That initiative has been warmly commended by all the industries involved in information technology.

Mrs. Shirley Williams: rose —

Mr. Jenkin: The right hon. Member for Crosby (Mrs. Williams) mentioned schools. We have embarked on a project to put a micro-computer into every secondary school in the land by the end of the year. We hope to follow that with a scheme for primary schools. We need to expand those programmes. The help and support being given to industry to modernise, to introduce new technology and to innovate is crucial if it is to become more competitive. Even in public sector industries, such as British Leyland and British Steel, new technology is being introduced. I am grateful for the remarks made on that point by my hon. Friend the Member for Bridlington (Mr. Townend). In the lines making the Triumph Acclaim and the Mini Metro, British Leyland now has facilities and robots that are every bit as productive as those of any other European motor company.
Steel production at the South Wales strip mills was reaching levels equivalent to the best in Europe. Until the ASLEF strikes forced cuts in production, steelmaking on Teesside was breaking all plant records. It must be heartbreaking for those who, with the new spirit of co-operation in steel, have achieved a record level of output and competitiveness to find their efforts torpedoed by the locomen, who are clinging to the letter of a 62-year-old agreement.

Mrs. Shirley Williams: rose —

Mr. Jenkin: I shall give way in a moment. Central to the debate—the right hon. Lady forcefully made this point—is whether firm monetary control is part of the solution, as my hon. Friends have recognised, or part of the problem, which is the view of the Opposition parties. They fail to recognise that every major OECD country protects its currency by controlling the money supply. Moreover, they have been doing so for some years. I quote these words:
I am convinced that a firm control of the growth of money and credit is an essential part of our strategy against inflation.
Those were not the words of my right hon. and learned Friend the Chancellor or even the President of the United States. That is what the right hon. Member for Leeds, East (Mr. Healey) said when addressing the International Monetary Fund in 1976.
All over the world Governments are aiming to reduce the level of borrowing to bring down interest rates. I have a long list of the countries, but I shall not weary the House with it. In their efforts to curb spending and relieve the upward pressure of interest rates the British Government have for most of the year been conspicuously more successful than our overseas competitors.
There are always those—to her discredit the right hon. Member for Crosby is one of them, although she used not

to be—who will argue that there is an easier way. The right hon. Lady called for a £5 billion to £6 billion public expenditure reflation. I remind her that her former right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) at the Labour Party conference in 1976 stated:
We used to think that you could just spend your way"—
[Interruption.] I am not surprised that the Opposition do not want to hear this, but they are going to.
We used to think that you could just spend your way out of a recession and increase employment by cutting taxes and boosting Government spending. I tell you in all candour that that option no longer exists, and that insofar as it ever did exist, it worked by injecting inflation into the economy. And each time that happened the average level of unemployment has risen. Higher inflation, followed by higher unemployment. That is the history of the last 20 years.
I am willing to bet that no one cheered louder than the right hon. Lady.

Mrs. Shirley Williams: The Secretary of State's intelligence is such that he will realise that there are not only two alternatives. He referred earlier to new technologies. Will he tell the House why, when the major barrier to the acceptance of new technologies is the shortage of electronic engineers, the Government have seen fit to cut grants to the universities?

Mr. Jenkin: I am not surprised that the right hon. Lady wanted to change the subject. Even after the reductions being made by the University Grants Committee there will still be an increase in the number of students studying engineering in all disciplines. That is a fact. The right hon. Lady should know that.
The right hon. Lady spoke about a £5 billion to £6 billion expansion plan. The right hon. Member for Ebbw Vale (Mr. Foot) put forward an even more ambitious plan. The right hon. Gentleman and the right hon. Lady also hope to get reduced interest rates. We all know that the right hon. Gentleman believes in fairies, higher spending, lower taxation and lower interest rates. It is surprising that, in asking for higher spending and lower taxation, the right hon. Lady did not have the brass in the House to say that she wanted to see lower interest rates. It does not fit in with what she said during her election campaign. At the top of her list of what the SDP would do on economic growth is "Bring interest rates down." How can she square a massive increase in Government spending with a reduction in taxation and lower interest rates? The right hon. Lady once had a reputation for intellectual integrity, but if she carries on like that she will destroy it.
The SDP says that all those factors will be controlled by an incomes policy, but if ever there was a case of tot homines tot sententiae it is the attitude of SDP members to an incomes policy. No two of them can agree. The right hon. Lady wants an incomes policy backed by law. Mr. Roy Jenkins wants a Layard type of tax on employers. The right hon. Lady said that she wants an incomes policy backed by an inflation tax on those who get more. She wants it paid by the employees. Professor Meade, who advises the SDP, wants arbitration. The right hon. Member for Stockton (Mr. Rodgers)—he is the simplest of them all—wants an agreement between the CBI, the TUC and the Government. If that is not possible, he says that "the Government would have to go it alone". That reminds me of the character in the films who was always being tied to railways—with one bound he was free.
We are progressively bringing down pay increases to more reasonable levels, and we are winning through. Why


does the SDP believe that next time it will be different? Members of the SDP have been in Government. They have tried and failed. At least the Liberals have never been in Government. They have not tried anything. We can leave that rag bag of politicians—those who have tried and failed and those who have never tried at all—to their own devices. We are now beginning to win through. Output is beginning to rise. Productivity is increasing. We have been winning more spectacular orders throughout the world than we have done for many years—£½ billion business in Nigeria in six months, a £¼ billion bank construction project in Hong Kong, a £170 million contract for a transpacific cable, a £150 million contract for a university in Oman and a £140 million gas storage project in Abu Dhabi.

Mr. Eric S. Heffer: How much in Liverpool?

Mr. Jenkin: Those orders are on top of the massive steel plant orders won by the Davy Corporation in India, Mexico, New Zealand and elsewhere. We are laying the foundations for a solid, lasting recovery leading to a restored strength to our economy. We are beginning to win back the customers we lost. As this debate is about jobs, I repeat that it is customers who provide jobs. It is customers who pay the wages. It is our customers putting their money on Britain who will provide work for our people.
The Opposition's amendment would throw us all back to the disasters of earlier years. I ask the House to reject the amendment and support the Government's motion.

Question put, That the amendment be made:—

The House divided: Ayes 213, Noes 293.

Division No. 51]
[10 pm


AYES


Abse, Leo
Cunliffe, Lawrence


Adams, Allen
Cunningham, DrJ. (W'h'n)


Allaun, Frank
Dalyell.Tam


Alton, David
Davidson.Arthur


Anderson, Donald
Davies, Rt Hon Denzil (L'lli)


Archer, Rt Hon Peter
Davis, Clinton (HackneyC)


Ashton, Joe
Davis, Terry (B'ham, Stechf'd)


Atkinson, N.(H'gey)
Dean, Joseph (Leeds West)


Barnett, Guy (Greenwich)
Dewar, Donald


Barnett, Rt Hon Joel (H'wd)
Dixon, Donald


Benn, Rt Hon Tony
Dobson, Frank


Bennett, Andrew(St'kp'tN)
Dormand, Jack


Booth, Rt HonAlbert
Douglas, Dick


Boothroyd, MissBetty
Dubs, Alfred


Bottomley, RtHonA(M'b'ro)
Dunlop, John


Bray, Dr Jeremy
Dunnett, Jack


Brown, Hugh D. (Provan)
Dunwoody, Hon Mrs G.


Brown, R. C. (N'castle W)
Eadie, Alex


Brown, Ron (E'burgh, Leith)
Ellis, R.(NED'bysh're)


Callaghan, Jim (Midd'tn&amp;P)
English, Michael


Campbell, Ian
Ennals, Rt Hon David


Campbell-Savours, Dale
Evans, loan (Aberdare)


Canavan, Dennis
Evans, John (Newton)


Cant, R. B.
Ewing, Harry


Carmichael, Neil
Faulds, Andrew


Carter-Jones, Lewis
Field, Frank


Clark, Dr David (S Shields)
Fitch, Alan


Cocks, Rt Hon M. (B'stolS)
Fitt, Gerard


Cohen, Stanley
Flannery, Martin


Coleman, Donald
Foot, Rt Hon Michael


Concannon, Rt Hon J..D.
Ford, Ben


Conlan, Bernard
Forrester, John


Cook, Robin F.
Foster, Derek


Cowans, Harry
Foulkes, George


Craigen, J. M. (G'gow, M'hill)
Fraser, J. (Lamb'th, N'w'd)


Crowther, Stan
Freeson, Rt Hon Reginald


Cryer, Bob
Garrett, John (NorwichS)





George, Bruce
Parry, Robert


Golding, John
Pendry, Tom


Graham, Ted
Powell, Raymond (Ogmore)


Grant, George(Morpeth)
Prescott, John


Hamilton, James(Bothwell)
Price, C. (Lewisham W)


Hamilton, W. W. (C'tral Fife)
Race, Reg


Harrison, Rt Hon Walter
Radice, Giles


Hart, Rt Hon Dame Judith
Rees, Rt Hon M (Leeds S)


Hattersley, Rt Hon Roy
Richardson, Jo


Heffer, Eric S.
Roberts, Albert (/vbrmanfo/T)


Hogg, N. (EDunb't'nshire)
Roberts, Allan('eoof/e;


Holland, S.(L'b'th, Vauxh'll)
Roberts, Ernest (Hackney N)


HomeRobertson, John
Roberts, Gwilym(Cannock)


Homewood, William
Robertson, George


Hooley, Frank
Robinson, G. (Coventry NW)


Howell, RtHon D.
Rodgers, RtHon William


Hoyle, Douglas
Rooker, J. W.


Huckfield, Les
Ross, Ernest (Dundee West


Hughes, Mark(Durham)
Rowlands, Ted


Hughes, Robert (Aberdeen N)
Ryman, John


Hughes, Roy (Newport)
Sever, John


Janner, HonGreville
Sheerman, Barry


Jay, Rt Hon Douglas
Sheldon, Rt Hon R.


John, Brynmor
Shore, Rt Hon Peter


Johnson, Walter (Derby S)
Short, MrsRenée


Jones, Rt Hon Alec (Rh'dda)
Silkin, Rt HonJ. (Deptford)


Jones, Barry (East Flint)
Silverman, Julius


Jones, Dan (Burnley)
Skinner, Dennis


Kaufman, Rt Hon Gerald
Smith, Cyril(Rochdale)


Kilfedder, JamesA.
Smith, Rt Hon J. (N Lanark)


Kilroy-Silk, Robert
Snaps, Peter


Lambie, David
Soley, Clive


Lamborn, Harry
Spearing, Nigel


Lamond, James
Spriggs, Leslie


Leadbitter, Ted
Stallard, A. W.


Leighton, Ronald
Stewart, Rt Hon D. (W Isles)


Lestor, MissJoan
Stoddart, David


Lewis, Arthur (N'hamNW)
Stott, Roger


Lewis, Ron (Carlisle)
Strang, Gavin


Litherland, Robert
Straw, Jack


Lofthouse, Geoffrey
Summerskill, HonDrShirley


Lyon, Alexander (York)
Taylor, Mrs Ann (Bolton W)


McCartney, Hugh
Thomas, Dafydd (Merioneth)


McDonald, DrOonagh
Thomas, DrR. (Carmarthen)


McElhone, Frank
Thorne, Stan (PrestonSouth)


McKay, Allen (Penistone)
Tilley, John


McKelvey, William
Torney, Tom


MacKenzie, Rt Hon Gregor
Varley, Rt Hon Eric G.


McNamara, Kevin
Wainwright.E.(DearneV)


McTaggart, Robert
Walker, Rt Hon H.(D'caster)


McWilliam, John
Watkins, David


Marks, Kenneth
Weetch, Ken


Marshall, D(G'gowS'ton)
Welsh, Michael


Marshall, Dr Edmund (Goole)
White, Frank R.


Marshall, Jim (LeicesterS)
White, J.(G'gowPollok)


Martin, M(G'gowS'burn)
Whitehead, Phillip


Mason, Rt Hon Roy
Whitlock, William


Maynard, MissJoan
Wigley, Dafydd


Meacher, Michael
Willey, Rt Hon Frederick


Mikardo, lan
Williams, Rt Hon A.(S'sea W)


Millan, Rt Hon Bruce
Wilson, Rt Hon SirH(H'ton)


Mitchell, Austin(Grimsby)
Wilson, William (C'trySE)


Morris, Rt Hon A. (W'shawe)
Winnick, David


Morton, George
Woodall, Alec


Moyle, Rt Hon Roland
Woolmer, Kenneth


Newens, Stanley
Wright, Sheila


Oakes, Rt Hon Gordon
Young, David (BoltonE)


O'Halloran, Michael



Orme, Rt Hon Stanley
Tellers for the Ayes:


Palmer, Arthur
Mr. James Tinn and


Park, George
Mr. Frank Haynes.


Parker, John



NOES


Adley, Robert
Arnold, Tom


Aitken, Jonathan
Aspinwall, Jack


Alexander, Richard
Atkins, Rt Hon H.(S'thorne)


Alison, Rt Hon Michael
Atkins, Robert(PrestonN)


Amery, Rt Hon Julian
Baker, Kenneth(St.M'bone)


Ancram, Michael
Baker, Nicholas (N Dorset)






Beaumont-Dark.Anthony
Gardiner, George(Reigate)


Bell, SirRonald
Gardner, Edward (S Fylde)


Bendall, Vivian
Garel-Jones, Tristan


Benyon, Thomas(A'don)
Gilmour, Rt Hon Sir lan


Benyon, W. (Buckingham)
Glyn, Dr Alan


Best, Keith
Goodlad, Alastair


Bevan, David Gilroy
Gorst, John


Biffen, Rt Hon John
Gow, lan


Biggs-Davison, Sir John
Gray, Hamish


Blackburn, John
Greenway, Harry


Blaker, Peter
Griffiths, E.(B'ySt. Edm'ds)


Body, Richard
Griffiths, Peter Portsm'thN)


Bonsor, SirNicholas
Grist, lan


Bottomley, Peter (W'wich W)
Grylls, Michael


Bowden.Andrew
Gummer, JohnSelwyn


Boyson.DrRhodes
Hamilton, Hon A.


Braine, SirBernard
Hamilton, Michael(Salisbury)


Bright, Graham
Hampson, DrKeith


Brinton, Tim
Hannam, John


Brittan, Rt. Hon. Leon
Haselhurst, Alan


Brooke, Hon Peter
Hastings, Stephen


Brotherton, Michael
Havers, Rt Hon Sir Michael


Brown, Michael(Brigg&amp;Sc'n)
Hawksley.Warren


Browne, John(Winchester)
Hayhoe, Barney


Bruce-Gardyne, John
Heath, Rt Hon Edward


Bryan, Sir Paul
Henderson.Barry


Buchanan-Smith, Rt. Hon. A.
Heseltine, Rt Hon Michael


Buck, Antony
Hicks, Robert


Budgen, Nick
Higgins, Rt Hon Terence L


Bulmer, Esmond
Hogg, HonDouglas(Gr'th'm)


Burden, SirFrederick
Holland, Philip(Carlton)


Butcher, John
Hooson, Tom


Butler, HonAdam
Hordern, Peter


Cadbury, Jocelyn
Howe, Rt Hon Sir Geoffrey


Carlisle, John (LutonWest)
Howell, RtHonD.(G'ldf'd)


Carlisle, Kenneth (Lincoln)
Hunt, David (Wirral)


Carlisle, Rt Hon M. (R'c'n)
Hunt, John(Ravensbourne)


Chalker, Mrs. Lynda
Hurd, HonDouglas


Channon, Rt. Hon. Paul
Irving, Charles(Cheltenham)


Chapman, Sydney
Jenkin, Rt Hon Patrick


Clark, Hon A. (Plym'th, S'n)
JohnsonSmith, Geoffrey


Clark, SirW. (Croydon S)
Jopling, RtHonMichael


Clarke, Kenneth (Rushcliffe)
Kaberry, SirDonald


Clegg, Sir Walter
Kellett-Bowman, MrsElaine


Cockeram, Eric
Kershaw, SirAnthony


Cope, John
King, Rt Hon Tom


Cormack, Patrick
Knox, David


Corrie, John
Lamond, James


Costain, SirAlbert
Lamont, Norman


Cranborne, Viscount
Lang, Ian


Critchley.Julian
Langford-Holt, SirJohn


Crouch, David
Latham, Michael


Dean, Paul (North Somerset)
Lawrence, Ivan


Dickens, Geoffrey
Lawson, Rt Hon Nigel


Douglas-Hamilton, LordJ.
Lee, John


Dover.Denshore
LeMarchant.Spencer


du Cann, Rt Hon Edward
Lennox-Boyd.HonMark


Dunn, Robert (Dartford)
Lester, Jim (Beeston)


Dykes, Hugh
Lewis Kenneth (Rutland)


Eden, Rt Hon Sir John
Lloyd, Ian (Havant &amp; W'loo)


Edwards, RtHon N. (P'broke)
Lloyd, Peter (Fareham)


Eggar, Tim
Loveridge, John


Elliott, SirWilliam
Luce, Richard


Emery, Sir Peter
Lyell, Nicholas


Eyre, Reginald
McCrindle, Robert


Fairgrieve, SirRussell
Macfarlane, Neil


Faith, Mrs Sheila
MacGregor, John


Farr, John
MacKay, John (Argyll)


Fell, SirAnthony
Macmillan, Rt Hon M.


Fenner, Mrs Peggy
McNair-Wilson, M.(N'bury)


Finsberg, Geoffrey
McNair-Wilson, P. (NewF'st)


Fisher, SirNigel
McQuarrie, Albert


Fletcher, A. (Ed'nb'ghN)
Madel, David


Fletcher-Cooke, SirCharles
Major, John


Fookes, Miss Janet
Marland, Paul


Forman, Nigel
Marlow, Antony


Fowler, Rt Hon Norman
Marshall, Michael(Arundel)


Fox, Marcus
Marten, RtHon Neil


Fraser, Peter (South Angus)
Mates, Michael


Fry, Peter
Maude, Rt Hon Sir Angus





Mawby, Ray
Shelton, William(Streatham)


Mawhinney, DrBrian
Shepherd, Colin (Hereford)


Maxwell-Hyslop, Robin
Shepherd, Richard


Mayhew, Patrick
Shersby, Michael


Mellor, David
Silvester, Fred


Meyer, Sir Anthony
Sims, Roger


Miller, Hal(B'grove)
Skeet, T. H. H.


Mills, lain(Meriden)
Speed, Keith


Miscampbell, Norman
Speller, Tony


Mitchell, David(Basingstoke)
Spence, John


Monro, SirHector
Spicer, Jim(West Dorset)


Montgomery, Fergus
Spicer, Michael(S Worcs)


Moore, John
Sproat, lain


Morris, M. (N'hamptonS)
Squire, Robin


Morrison, HonC. (Devizes)
Stanbrook, lvor


Morrison, Hon P. (Chester)
Stanley, John


Mudd, David
Steen, Anthony


Murphy, Christopher
Stevens, Martin


Myles, David
Stewart, A. (ERenfrewshire)


Neale, Gerrard
Stewart, lan (Hitchin)


Needham, Richard
Stokes, John


Nelson, Anthony
Stradling Thomas.J.


Neubert, Michael
Tapsell, Peter


Newton, Tony
Taylor, Teddy (S'end E)


Normanton, Tom
Tebbit, Rt Hon Norman


Nott, RtHon John
Temple-Morris, Peter


O'Halloran, Michael
Thatcher, Rt Hon Mrs M.


Onslow, Cranley
Thomas, Rt Hon Peter


Oppenheim, Rt Hon Mrs S.
Thompson, Donald


Page, Richard (SW Herts)
Thorne, Neil(llfordSouth)


Parkinson, RtHonCecil
Thornton, Malcolm


Parris, Matthew
Townend, John (Bridlington)


Patten, Christopher(Bath)
Townsend, CyrilD.(B'heath)


Patten, John(Oxford)
Trippier, David


Pattie, Geoffrey
Trotter, Neville


Pawsey, James
van Straubenzee, SirW.


Percival, Sir lan
Vaughan, DrGerard


Pink, R.Bonner
Viggers, Peter


Pollock, Alexander
Waddington, David


Prentice, RtHon Reg
Wakeham, John


Price, Sir David (Eastleigh)
Waldegrave, HonWilliam


Prior, Rt Hon James
Walker, Rt Hon P.(W'cester)


Proctor, K. Harvey
Walker-Smith, RtHon Sir D.


Pym, Rt Hon Francis
Waller, Gary


Raison, Timothy
Walters, Dennis


Rathbone, Tim
Ward, John


Rees, Peter (Dover and Deal)
Watson, John


Rees-Davies, W. R.
Wells, Bowen


Renton, Tim
Wells, John(Maidstone)


RhodesJames, Robert
Wheeler, John


Rhys Williams, SirBrandon
Whitelaw, RtHon William


Ridley, HonNicholas
Whitney, Raymond


Ridsdale, SirJulian
Wickenden, Keith


Rifkind, Malcolm
Wiggin, Jerry


Roberts, M. (Cardiff NW)
Williams.D.(Montgomery)


Roberts, Wyn (Conway)
Winterton, Nicholas


Rossi, Hugh
Wolfson, Mark


Rost, Peter
Young, SirGeorge(Acton)


Sainsbury, HonTimothy
Younger, RtHon George


St. John-Stevas, Rt Hon N.



Scott, Nicholas
Tellers for the Noes:


Shaw, Giles (Pudsey)
Mr. Anthony Berry and


Shaw, Michael (Scarborough)
Mr. Robert Boscawen.

Question accordingly negatived.

Main Question put:—

The House divided: Ayes 291, Noes 246.

Division No. 52]
[10.12pm


AYES


Adley, Robert
Atkins, Robert(PrestonN)


Aitken, Jonathan
Baker, Kenneth(St.M'bone.)


Alexander, Richard
Baker, Nicholas (N Dorset)


Alison, Rt Hon Michael
Beaumont-Dark, Anthony


Amery, RtHon Julian
Bell, SirRonald


Ancram, Michael
Bendall, Vivian


Arnold, Tom
Benyon, Thomas(A'don)


Aspinwall, Jack
Benyon, W. (Buckingham)


Atkins, RtHonH.(S'thorne)
Best, Keith






Bevan, David Gilroy
Gow, lan


Biffen, Rt Hon John
Gray, Hamish


Biggs-Davison, Sir John
Greenway, Harry


Blackburn, John
Griffiths, E.(B'ySt.Edm'ds)


Blaker, Peter
Griffiths, Peter Portsm'thN)


Body, Richard
Grist, lan


Bonsor, SirNicholas
Grylls, Michael


Bottomley, Peter (W'wichW)
Gummer, JohnSelwyn


Bowden, Andrew
Hamilton, Hon A.


Boyson, Dr Rhodes
Hamilton, Michael(Salisbury)


Braine, SirBernard
Hampson, DrKeith


Bright, Graham
Hannam, John


Brinton, Tim
Haselhurst, Alan


Brittan, Rt. Hon. Leon
Hastings, Stephen


Brooke, Hon Peter
Havers, Rt Hon Sir Michael


Brotherton, Michael
Hawksley, Warren


Brown, Michael(Brigg&amp;Sc'n)
Heath, RtHon Edward


Browne, John (Winchester)
Henderson, Barry


Bruce-Gardyne, John
Heseltine, RtHon Michael


Bryan, Sir Paul
Hicks, Robert


Buchanan-Smith, Rt. Hon. A.
Higgins, RtHon Terence L


Buck, Antony
Hogg, HonDouglas(Gr'th'm)


Budgen, Nick
Holland, Philip(Carlton)


Bulmer, Esmond
Hooson, Tom


Burden, SirFrederick
Hordern, Peter


Butcher, John
Howe, Rt Hon Sir Geoffrey


Butler, Hon Adam
Howell, RtHon D.(G'ldf'd)


Cadbury, Jocelyn
Hunt, David (Wirral)


Carlisle, John (Luton West)
Hunt, John(Ravensbourne)


Carlisle, Kenneth (Lincoln)
Hurd, HonDouglas


Carlisle, RtHon M. (R'c'n)
Irving, Charles (Cheltenham)


Chalker, Mrs. Lynda
Jenkin, RtHon Patrick


Channon, Rt. Hon. Paul
JohnsonSmith, Geoffrey


Chapman, Sydney
Jopling, RtHon Michael


Clark, Hon A. (Plym'th, S'n)
Kaberry, SirDonald


Clark, SirW. Croydon S)
Kellett-Bowman, MrsElaine


Clarke, Kenneth (Rushcliffe)
Kershaw, SirAnthony


Clegg, SirWalter
King, RtHon Tom


Cockeram, Eric
Knox, David


Cope, John
Lamont, Norman


Cormack, Patrick
Lang, lan


Corrie, John
Langford-Holt, SirJohn


Costain, SirAlbert
Latham, Michael


Cranborne, Viscount
Lawrence, lvan


Critchley, Julian
Lawson, Rt Hon Nigel


Dean, Paul (North Somerset)
Lee, John


Dickens, Geoffrey
LeMarchant, Spencer


Douglas-Hamilton, Lord J.
Lennox-Boyd, HonMark


Dover, Denshore
Lester, Jim (Beeston)


du Cann, Rt Hon Edward
Lewis, Kenneth(Rutland)


Dunn, Robert(Dartford)
Lloyd, lan (Havant &amp; W'loo)


Dykes, Hugh
Lloyd, Peter (Fareham)


Eden, RtHon Sir John
Loveridge, John


Edwards, Rt Hon N. (P'broke)
Luce, Richard


Eggar, Tim
Lyell, Nicholas


Elliott, SirWilliam
McCrindle, Robert


Emery, Sir Peter
Macfarlane, Neil


Eyre, Reginald
MacGregor, John


Fairgrieve, SirRussell
MacKay, John (Argyll)


Faith, MrsSheila
Macmillan, Rt Hon M.


Farr, John
McNair-Wilson, M.(N'bury)


Fell, Sir Anthony
McNair-Wilson, P.(NewF'st)


Fenner, Mrs Peggy
McQuarrie, Albert


Finsberg, Geoffrey
Madel, David


Fisher, SirNigel
Major, john


Fletcher, A. (Ed'nb'ghN)
Marland, Paul


Fletcher-Cooke, SirCharles
Marlow, Antony


Fookes, Miss Janet
Marshall, Michael (Arundel)


Forman, Nigel
Marten, Rt Hon Neil


Fowler, RtHon Norman
Mates, Michael


Fox, Marcus
Maude, RtHon Sir Angus


Fraser, Peter (South Angus)
Mawby, Ray


Fry, Peter
Mawhinney, DrBrian


Gardiner, George(Reigate)
Maxwell-Hyslop, Robin


Gardner, Edward (S Fylde)
Mayhew, Patrick


Garel-Jones, Tristan
Mellor, David


Gilmour, RtHon Sir lan
Meyer, Sir Anthony


Glyn, Dr Alan
Miller, Hal(B'grove)


Goodlad, Alastair
Mills, lain(Meriden)


Gorst, John
Miscampbell, Norman





Mitchell, David (Basingstoke)
Skeet, T. H. H.


Monro, SirHector
Speed, Keith


Montgomery, Fergus
Speller, Tony


Moore, John
Spence, John


Morris, M.(N'hamptonS)
Spicer, Jim (West Dorset)


Morrison, Hon C. (Devizes)
Spicer, Michael (S Worcs)


Morrison, Hon P. (Chester)
Sproat, lain


Mudd, David
Squire, Robin


Murphy, Christopher
Stanbrook, lvor


Myles, David
Stanley, John


Neale, Gerrard
Steen, Anthony


Needham, Richard
Stevens, Martin


Nelson, Anthony
Stewart, A.(ERenfrewshire)


Neubert, Michael
Stewart, Ian (Hitchin)


Newton, Tony
Stokes, John


Normanton, Tom
Stradling Thomas, J.


Nott, RtHonJohn
Tapsell, Peter


Onslow, Cranley
Taylor, Teddy (S'end E)


Oppenheim, Rt Hon Mrs S.
Tebbit, Rt Hon Norman


Page, Richard (SW Herts)
Temple-Morris, Peter


Parkinson, RtHonCecil
Thatcher, Rt Hon Mrs M.


Parris, Matthew
Thomas, Rt Hon Peter


Patten, Christopher(Bath)
Thompson, Donald


Patten, John (Oxford)
Thorne, Neil (llfordSouth)


Pattie, Geoffrey
Thornton, Malcolm


Pawsey, James
Townend, John(Bridlington)


Percival, Sir lan
Townsend, Cyril D, (B'heath)


Pink, R.Bonner
Trippier, David


Pollock, Alexander
Trotter, Neville


Prentice, Rt Hon Reg
van Straubenzee, SirW.


Price, SirDavid (Eastleigh)
Vaughan, DrGerard


Prior, RtHon James
Viggers, Peter


Proctor, K. Harvey
Waddington, David


Pym, Rt Hon Francis
Wakeham, John


Raison, Timothy
Waldegrave, HonWilliam


Rathbone, Tim
Walker, Rt Hon P.(W'cester)


Rees, Peter (Dover and Deal)
Walker-Smith, Rt Hon Sir D.


Rees-Davies, W. R.
Waller, Gary


Renton, Tim
Walters, Dennis


Rhodes James, Robert
Ward, John


RhysWilliams, SirBrandon
Watson, John


Ridley, HonNicholas
Wells, Bowen


Ridsdale, SirJulian
Wells, John (Maidstone)


Rifkind, Malcolm
Wheeler, John


Roberts, M. (Cardiff NW)
Whitelaw, RtHon William


Roberts, Wyn (Conway)
Whitney, Raymond


Rossi, Hugh
Wickenden, Keith


Sainsbury, HonTimothy
Wiggin, Jerry


St. John-Stevas, Rt Hon N.
Williams.D. (Montgomery)


Scott, Nicholas
Winterton, Nicholas


Shaw, Giles (Pudsey)
Wolfson, Mark


Shaw, Michael(Scarborough)
Young, SirGeorge(Acton)


Shelton, William(Streatham)
Younger, RtHon George


Shepherd, Colin (Hereford)



Shepherd, Richard
Tellers for the Ayes:


Shersby, Michael
Mr. Anthony Berry and


Silvester, Fred
Mr. Robert Boscawen.


Sims, Roger



NOES


Abse, Leo
B rown, Ron (E'burgh, Leith)


Adams, Allen
Callaghan, Jim (Midd't'n&amp;P)


Allaun, Frank
Campbell, lan


Alton, David
Campbell-Savours, Dale


Anderson, Donald
Canavan, Dennis


Archer, Rt Hon Peter
Cant, R. B.


Ashton, Joe
Carmichael, Neil


Atkinson, N.(H'gey)
Carter-Jones, Lewis


Barnett, Guy (Greenwich)
Cartwright, John


Barnett, Rt Hon Joel (H'wd)
Clark, Dr David (S Shields)


Benn, Rt Hon Tony
Cocks, Rt Hon M. (B'stol S)


Bennett, Andrew(St'kp'tN)
Cohen, Stanley


Booth, RtHon Albert
Coleman, Donald


Boothroyd, MissBetty
Concannon, Rt Hon J. D.


Bottomley, RtHonA(M'b'ro)
Conlan, Bernard


Bradley, Tom
Cook, Robin F.


Bray, Dr Jeremy
Cowans, Harry


Brocklebank-Fowler, C.
Craigen, J. M. (G'gow, M'hill)


Brown, Hugh D. (Provan)
Crawshaw, Richard


Brown, R. C. (N'castle W)
Crowther, Stan






Cryer, Bob
HomeRobertson, John


Cunningham, G.(IslingtonS)
Homewood, William


Cunningham, DrJ. (W'h'n)
Hooley, Frank


Dalyell, Tam
Horam, John


Davidson, Arthur
Howell, RtHonD.


Davies, Rt Hon Denzil (L'lli)
Howells, Geraint


Davis, Clinton (Hackney C)
Hoyle, Douglas


Davis, Terry (B 'ham, Stechf'd)
Huckfield, Les


Dean, Joseph (Leeds West)
Hughes, Mark(Durham)


Dewar, Donald
Hughes, Robert (AberdeenN)


Dixon, Donald
Hughes, Roy (Newport)


Dobson, Frank
Janner, HonGreville


Dormand, Jack
Jay, Rt Hon Douglas


Douglas, Dick
John, Brynmor


Douglas-Mann, Bruce
Johnson, Walter (Derby S)


Dubs, Alfred
Johnston, Russell (Inverness)


Dunlop, John
Jones, Rt Hon Alec (Rh'dda)


Dunn, James A.
Jones, Barry (East Flint)


Dunnett, Jack
Jones, Dan (Burnley)


Dunwoody, Hon Mrs G.
Kaufman, Rt Hon Gerald


Eadie, Alex
Kilfedder, JamesA.


Ellis, R.(NED'bysh're)
Kilroy-Silk, Robert


Ellis, Tom (Wrexham)
Lambie, David


English, Michael
Lamborn, Harry


Ennals, Rt Hon David
Lamond, James


Evans, loan (Aberdare)
Leadbitter, Ted


Evans, John (Newton)
Leighton, Ronald


Ewing, Harry
Lestor, Miss Joan


Faulds, Andrew
Lewis, Arthur(N'ham NW)


Field, Frank
Lewis, Ron (Carlisle)


Fitch, Alan
Litherland, Robert


Fitt, Gerard
Lofthouse, Geoffrey


Flannery, Martin
Lyon, Alexander(York)


Foot, Rt Hon Michael
Lyons, Edward (Bradf'dW)


Ford, Ben
Mabon, Rt Hon Dr J. Dickson


Forrester, John
McCartney, Hugh


Foster, Derek
McDonald, DrOonagh


Foulkes, George
McElhone, Frank


Fraser, J. (Lamb'th, N'w'd)
McKay, Allen(Penistone)


Freeson, Rt Hon Reginald
McKelvey, William


Freud, Clement
MacKenzie, Rt Hon Gregor


Garrett, John (NorwichS)
Maclennan, Robert


George, Bruce
McNally, Thomas


Ginsburg, David
McNamara, Kevin


Golding, John
McTaggart, Robert


Graham, Ted
McWilliam, John


Grant, George (Morpeth)
Marks, Kenneth


Grant, John (IslingtonC)
Marshall, D(G'gowS'ton)


Grimond, RtHonJ.
Marshall, Dr Edmund (Goole)


Hamilton, James(Bothwell)
Marshall, Jim (LeicesterS)


Hamilton, W. W. (C'tral Fife)
Martin, M(G'gowS'burn)


Harrison, Rt Hon Walter
Mason, Rt Hon Roy


Hart, Rt Hon Dame Judith
Maynard, MissJoan


Hattersley, Rt Hon Roy
Meacher, Michael


Haynes, Frank
Mikardo, lan


Heffer, Eric S.
Millan, Rt Hon Bruce


Hogg, N. (EDunb't'nshire)
Mitchell, Austin (Grimsby)


Holland, S.(L'b'th, Vauxh'll)
Mitchell, R. C. (Soton Itchen)





Morris, Rt Hon A. (W'shawe)
Spearing, Nigel


Moyle, Rt Hon Roland
Spriggs, Leslie


Newens, Stanley
Stallard, A.W.


Oakes, Rt Hon Gordon
Steel, Rt Hon David


Ogden, Eric
Stewart, Rt Hon D. (W Isles)


O'Halloran, Michael
Stoddart, David


Orme, Rt Hon Stanley
Stott, Roger


Owen, Rt Hon Dr David
Strang, Gavin


Paisley, Rev Ian
Straw, Jack


Palmer, Arthur
Summerskill, HonDrShirley


Park, George
Taylor, Mrs Ann (Bolton W)


Parker, John
Thomas, Dafydd(Merioneth)


Parry, Robert
Thomas, Jeffrey(Abertillery)


Pendry, Tom
Thomas, Mike (Newcastle E)


Penhaligon, David
Thomas, DrR.(Carmarthen)


Powell, Raymond(Ogmore)
Thorne, Stan (PrestonSouth)


Prescott, John
Tilley, John


Price, C.(Lewisham W)
Tinn, James


Race, Reg
Torney, Tom


Radice, Giles
Varley, Rt Hon Eric G.


Rees, Rt Hon M (Leeds S)
Wainwright.E.(DearneV)


Richardson, Jo
Wainwright, R.(ColneV)


Roberts, Albert(Normanton)
Walker, Rt Hon H.(D'caster)


Roberts, Allan(Bootle)
Watkins, David


Roberts, Ernest (Hackney N)
Weetch, Ken


Roberts, Gwilym(Cannock)
Wellbeloved, James


Robertson, George
Welsh, Michael


Robinson, G. (Coventry NW)
White, Frank R.


Rodgers, RtHon William
White, J.(G'gow Pollok)


Rooker, J. W.
Whitehead, Phillip


Roper, John
Whitlock, William


Ross, Ernest (Dundee West)
Wigley, Dafydd


Rowlands, Ted
Willey, RtHon Frederick


Ryman, John
Williams, Rt Hon A.(S'sea W)


Sandelson, Neville
Williams, Rt Hon Mrs (Crosby)


Sever, John
Wilson, RtHonSirH.(H'ton)


Sheerman, Barry
Wilson, William (C'trySE)


Sheldon, RtHon R.
Winnick, David


Shore, Rt Hon Peter
Woodall, Alec


Short, Mrs Renée
Woolmer, Kenneth


Silkin, Rt Hon J. (Deptford)
Wrigglesworth, lan


Silverman, Julius
Wright, Sheila


Skinner, Dennis
Young, David (BoltonE)


Smith, Cyrill (Rochdale)



Smith, Rt Hon J. (N Lanark)
Tellers for the Noes:


Snape, Peter
Mr. Lawrence Cunliffe and


Soley, Clive
Mr. George Morton.

Question accordingly agreed to.

Resolved,

That this House, greatly concerned about the difficulties facing those who cannot find jobs, supports the Government's policies which are helping to make British industry more competitive and which therefore offer the best prospect of a permanent improvement in job opportunities for people in this country.

Walkie-Talkie Equipment

Motion made, and Question proposed, That this House do now Adjourn—[Mr. Cope.]

10. 24 pm

Miss Joan Lestor: I shall try not to delay the House too long. I know that the Minister is aware of the matter that I wish to raise. It is a somewhat complicated situation. My object is to gain some clarification pending, I hope, changes in the law to put the matter in order. As the Minister is aware—I have corresponded with him about the issue—it is now possible to buy in this country what are commonly known as walkie-talkie sets from various shops dealing in electrical equipment. Usually the sets are bought by young boys and girls. They can operate at a distance of about one-quarter of a mile.
The sets are make in Taiwan or elsewhere. The packages are often marked "No licence required". They are made for the American market where no licence is required. In Britain the problem is that the use of such equipment is illegal because it interferes with various frequencies.
It is strange that the sale of such sets is legal but their use is illegal. When I first stumbled upon the anomaly my reaction was to assume that, because the use of the equipment was illegal, the selling of it was also illegal. I probed and inquired and discovered that retailers and importers could not be taken to task because they were not breaking the law, but users of the equipment were breaking the law.
That is not known and youngsters are buying the sets and will be in trouble if they use them. I have discussed the problem with the police and they are as confused as everybody else. On occasions they tell young people to stop using the equipment because of the difficulties caused to frequencies. Such sets also interfere with television reception.
The matter has become further complicated since the legalising of citizens band radio. That has caused confusion. Many people believe that that move also legalised the use of walkie-talkie equipment. The press has made inquiries and the impression is that walkie-talkie sets were legalised with CB radio. What worries me is that shops can sell the equipment legally, perhaps caring little. Many shops sell the equipment in all innocence because the packaging states that no licence is required, implying that their use is legal.
Many young people spend between £18 and £20 on equipment for communicating with their friends. In the event, they are told that it is an offence against the Wireless Telegraphy Act. I have asked the Minister to amend that Act. He has said that he will do so when parliamentary time permits. I believe that such an amendment could be made soon. In the meantime, it would be useful for the young people and the retailers, who seem to be as ignorant as everybody else about the position, if a statement were made about the exact situation. Perhaps young people could be advised against purchasing such sets.
The legal position is confusing and misleading. Most of the sets are imported and that adds to the confusion. The packets say that no licence is needed. Many people believe that they need a licence but the Home Office, in response

to many telephone calls, has said that it is not a question of a licence but that such sets should not be used. It will be enormously helpful to retailers, young people and the police if the matter is clarified, if the distinction between walkies-talkies and citizens band radio is made clear and if the right hon. Gentleman makes it clear how he intends to deal with the issue, and whether he will introduce legislation in the fairly near future.

The Minister of State, Home Office (Mr. Timothy Raison): I am grateful to the hon. Member for Eton and Slough (Miss Lestor) for raising this subject tonight. She has performed a useful service in raising it and I shall try to provide the clarification for which she is asking. I hope that she will not mind too much if I first make it clear that the 49 MHz walkie-talkie equipment to which she has drawn attention is not citizens band equipment as it is known anywhere in the world. The subject of her Adjournment debate rather implies that it is citizen's band equipment but I think that she now realises that that is not so

Miss Lestor: I have gone to great lengths to explain to everybody that I was not talking about citizens band radio. The press has constantly jumped to the conclusion that that is what I am raising and it has put the two together.

Mr. Raison: I do not want to be churlish, but if the hon. Lady reads the Order Paper she will see that it states:
On the motion for the Adjournment of the House under Standing Order No. 1 Miss Joan Lestor proposes to raise the subject of the continued legal sale of citizens' band radio"—

Miss Lestor: I did not put that on the Order Paper.

Mr. Raison: That is the dilemma.
The important thing is to establish the facts and I shall try to help do that. We are not dealing with citizens band radio as it is generally known. These walkie-talkies are usually limited in range to about half a mile. They were first produced for the American market, where the United States Administration permits their use without the requirement of a licence. I think that that may be part of the cause of the difficulty to which the hon. Lady has referred. Citizens band operates in a different frequency band of around 27 MHz as well as being higher-poweredyet CB does spring to mind in at least one respect as a parallel because some people operating in that area have been less than honest and have sold equipment that they know perfectly well may not legally be used in the United Kingdom.
The function of radio regulations for which I am responsible within the Home Office is to allow the maximum number of people to use radio as freely as possible. This means without causing interference to other users of radio or suffering it themselves. Interference is a major problem. It causes considerable annoyance, and is expensive and time-consuming to deal with.
Our controls are basically of two sorts. First, we can specify the standards that radio equipment should meet, and secondly, we issue licences authorising users to use equipment upon certain conditions. The position under the Wireless Telegraphy Act 1949 is perfectly clear. All radio equipment requires a licence issued by the Secretary of State unless it has been exempted from that requirement. The only exemptions that have been made are broadcasting or amateur radio receivers, which were exempted in 1970, and model control and metal detecting equipment, which


were exempted in 1980. All other radio equipment, both transmitting and receiving, without exception requires a licence, although we hope that it may be possible in future to extend exemption to some other very low powered non-speech devices.
The 49 MHz walkie-talkies to which we have referred operate in this country in the frequency band used for 405-line television broadcasting. We cannot add a different service at the same place without causing interference. I would not suggest that the 49 MHz walkie-talkies are creating or are capable of creating problems on the scale of CB, but their potential effect should not be underrated. 405-line television broadcasting will cease by the end of 1986, but a decision has not yet been reached on the future use of the band. We cannot prejudice this decision, and limit our freedom to replan the band with the maximum degree of flexibility by permitting in the middle of it a non-essential speech service. Furthermore, legal CB of course provides a simple and better alternative. Thus the 49 MHz equipment we are discussing is illegal and will remain so. It is not licenseable in this country, and anyone using it is committing an offence.
I would add at this stage that the police are not the most appropriate source of advice for anyone unsure of what is required in connection with any use of radio. The police do not even take the lead in enforcement, although they do give a great deal of assistance to the radio interference service in their task. Any questions about radio regulatory requirements should be directed to the Home Office radio regulatory department, which will do its best to help.
As the House and the hon. Lady know, there are at present no powers under wireless telegraphy legislation to control the sale or advertising for sale of any wireless telegraphy apparatus. We have the powers to ban the manufacture or import of wireless telegraphy equipment, but the only occasion on which this power has been exercised was in 1968 in relation to 27 MHz CB equipment. That remains the position, although provision has now been made for the import and manufacture of CB equipment that meets our published specifications. The hon. Lady has written to me recently about a case of this kind, to which I hope to reply before long, but it seems to be a matter of confiscation by Her Majesty's Customs of articles whose import into the United Kingdom is forbidden under the Control of Importation and Manufacture Order to which I have just referred.
We have for some time been conscious of weaknesses in the enforcement powers under this legislation. There are two or three areas in particular. First, some of the penalties available under the legislation are outdated and inadequate, and we should like to bring them into line with modern practice, as well as recognising the seriousness of some present-day offences. In this context, the Criminal Justice Bill now before the House will, by its across-the-board uprating of summary fines, make at least a contribution towards this. For example, the maximum fine for the offence of unlicensed transmission will be

increased from £400 to £1, 000 and this will apply whether we are talking of private mobile radio or CB or pirate broadcasting.
Secondly, we are concerned that while courts can and frequently do order forfeiture of equipment that has been used illegally, there are no powers available to enforcement officers to detain such equipment until a court can decide. We have all too much evidence of equipment that has, prima facie, been illegally used continuing to be so used before a case comes for trial, and we should like to do something about that. Finally, we should like to seek powers to ban the sale or advertising for sale of designated wireless telegraphy apparatus. In these three areas at least, we intend to bring proposals before the House when parliamentary time permits.
Two important points, however, flow from the fact that our main concern is the prevention of interference. First, we might not be justified in using sweeping powers if there were not a real problem. Illicit 27 MHz CB apparatus certainly falls into this category, harming as it does many other radio services and even in certain circumstances the legal CB service itself.
At this stage at least the 49 MHz walkie-talkies that we are discussing today present a much lesser problem. On the other hand, their more widespread use would worsen the position, and they prejudice the future use of the band in which they operate, which will be vital for the development of certain radio services in the next few years.
Secondly, our concern under the wireless telegraphy legislation is the regulation of radio and the protection of radio services. It would not be appropriate for us to use radio regulatory powers for the protection of consumers, although I recognise that in certain circumstances there can be a useful and welcome spin-off.
The hon. Lady has referred to the packaging of these walkie-talkies or the leaflets which accompany them as stating "No licence required". That may be true of the United States, where the pattern of use is different, but is quite wrong of this country. I strongly deplore the practice of retailers in selling equipment labelled in this way, which misleads a purchaser as to the requirements in this country. I shall be drawing the attention of my right hon. Friend the Minister for Consumer Affairs to this point. She will doubtless wish to consider whether the practice falls within the scope of the Trade Descriptions Act 1968, and if so, whether trading standards officers can help.
I can assure the hon. Lady that we keep this whole subject under careful review. If and when we obtain a power to ban the sale or advertising for sale of wireless telegraphy equipment, we would expect to apply that power to the 49 MHz walkie-talkies.
I hope that I have answered the hon. Lady's points. I have made quite clear what the position is. I repeat that I am grateful to her for raising this subject today.

Question put and agreed to.

Adjourned accordingly at twenty-one minutes to Eleven o'clock.